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229    BROADWAY,    NEW    YORK 


CORPORATE   ORGANIZATION. 
By  THOMAS  CONYNGTON,  of  the  New  York  Bar. 
352  pp.  6x9  in.      1905.   Buckram  binding. 

Prepaid  price,  $2.70 

CORPORATE   MANAGEMENT. 

By  THOMAS  CONYNGTON.     Second   Edition.     352 

pp.      6x9   in.      1904.      Buckram   binding. 

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THE   MODERN   CORPORATION. 

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CLASSIFIED  CORPORATION  LAWS  OF  ALL 
THE  STATES.      • 

By    M.    U.    OVERLAND,    of    the    New    York    Bar. 
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MAINE  CORPORATIONS. 

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CIRCULARS    OF    ANY    OF    THE    ABOVE    BOOKS 
ON    APPLICATION 


A   MANUAL 


OF 


CORPORATE  MANAGEMENT 

I/  p 


CONTAINING 


FORMS,  DIRECTIONS  AND  INFORMATION 

FOR  THE  USE  OF  LAWYERS  AND 

CORPORATION  OFFICIALS 


SECOND    PRINTING 


NEW  YORK 

THE   RONALD  PRESS 
1904 


COPYRIGHT,   1903, 
BY 

THE  RONALD  PRESS 


COPYRIGHT,   1904, 
BY 

THE  RONALD  PRESS 


PREFACE. 


The  purpose  of  the  present  volume  is  to  furnish  a  compact, 
well-arranged  and  reliable  work  on  corporate  management  for 
the  use  of  lawyers  and  corporation  officials.  The  many  details 
of  corporate  procedure  have  been  collated,  stated  as  clearly  as 
may  be  and  with  due  comment,  and  so  set  forth  with  full  index 
and  plentiful  cross-references  as  to  permit  of  ready  and  con- 
venient reference. 

Corporate  organization  is  treated  incidentally  and  only  so 
far  as  is  requisite  for  a  clear  understanding  of  the  text,  the 
general  subject  of  organization  being  reserved  for  a  subsequent 
volume. 

Any  general  discussion  of  the  local  statutes  by  which  the 
principles  of  corporation  law  are  modified  and  supplemented  in 
the  various  states  is  utterly  precluded  by  the  limits  of  the  pres- 
ent volume.  New  York  and  New  Jersey  have  therefore  been 
selected  as  best  representing  the  modern  development  of  corpo- 
ration law  and  the  work  prepared  with  special  reference  to 
their  statutes  and  practice.  In  other  states  the  statutes  must 
be  consulted  for  local  requirements  or  regulations. 

No  pains  have  been  spared  to  make  the  entire  work  accu- 
rate, reliable  and  in  accord  with  the  best  modern  practice. 
Particularly  is  this  true  of  the  collated  forms  presented  in  Part 
IV.  These  forms  cover  almost  the  entire  range  of  ordinary 
corporate  procedure,  are  those  approved  by  the  leading  corpo- 
ration attorneys,  and  may  be  used  with  confidence. 

The  forms  given  are  presented  as  precedents  and  without 
the  usual  blanks  where  variable  matter  occurs.  A  better  idea 
of  the  instrument  as  a  whole  is  thereby  given.  Also,  the 

iii 


iv  INTRODUCTION. 

changes  necessary  to  adapt  a  form  to  any  special  need  are  more 
readily  made  from  the  completed  instrument  than  from  one 
disjointed  by  frequent  and  sometimes  puzzling  omissions. 

The  author  takes  this  opportunity  to  sincerely  thank  the 
many  friends,  both  lay  and  professional,  who  have  aided  him 
in  the  present  volume;  also  to  express  the  hope  that  he  will 
receive  from  those  into  whose  hands  the  work  may  come,  all 
such  further  suggestions  and  criticisms  as  will  tend  to  the 
improvement  of  future  editions. 

THOMAS  CONYNGTON. 

No.  170  BROADWAY, 

New  York  City,  May  I,  1903. 


TABLE  OF  CONTENTS. 


PART    I.— INTRODUCTORY. 

Chapter  I. — General  Information. 

§  I.  The  Corporation. 

2.  Stock  Corporations. 

3.  Joint  Stock  Companies. 

4.  Business   Corporations. 

5.  Stock. 

6.  Stockholders. 

7.  Certificates  of  Stock. 

8.  Formation    of   a    Corporation. 

9.  The  Corporate  System. 

10.  Charter. 

11.  By-Laws. 

12.  Directors. 

13.  Officers. 

14.  Advantages  of  Corporate  Form. 

15.  (i)  Limited  Liability. 

16.  (2)  Convenience  of  Stock. 

17.  (3)  Permanence. 

Chapter  II.— The  Charter. 

§  18.  The  Charter. 

19.  Parties. 

20.  Purposes. 

21.  Execution  of  Charter. 

22.  Amendment  of  Charter. 

23.  Filing  Charter. 

24.  Incidental  Powers. 

25.  (i)  To  Sue  and  be  Sued. 

26.  (2)  To  Use  a  Seal. 

27.  (3)  To  Buy,  Sell  and  Hold  Property. 

28.  (4)  To  Appoint  Directors,  Officers  and  Agents. 


VI  TABLE  OF   CONTENTS. 

§  29  (5)  To  Make  By-Laws. 

30.  (6)  To  Dissolve  the  Corporation. 

31.  (7)  To  Do  All  Things  Necessary. 

32.  Things  "  Ultra  Vires." 


PART  II.— CONCERNING  BY-LAWS. 


Chapter  III.— By-Laws. 

33.  Nature  of  By-Laws. 

34.  Making  of  By-Laws. 

35.  Amendment  of  By-Laws. 

36.  Enforcement  of  By-Laws. 

37.  Non-observance  of  By-Laws. 

38.  Classification  of  By-Laws. 

39.  Record  of  By-Laws. 


Chapter  IV.— Stock. 

40.  Introductory. 

41.  Kinds  of  Stock. 

42.  Subscriptions. 

43.  Certificates  of  Stock. 

44.  Transfers  of  Stock. 

45.  Lost  Certificates. 

46.  Stock  and  Transfer  Books. 

47.  Preferred  Stock. 

48.  Treasury  Stock. 

49.  General. 

Chapter  V. — Stockholders. 

50.  Annual  Meetings. 

51.  Special  Meetings. 

52.  Notice  of  Meetings. 

53.  Voting. 

54.  Election  of  Directors. 

55.  Quorum. 

56.  Proxies. 

57.  Officers  of  Meetings. 

58.  Order  of  Business. 

59.  Rights  of  Stockholders. 

60.  Powers  of  Stockholders. 

61.  Liabilities  of  Stockholders. 

62.  General. 


TABLE  OF  CONTENTS.  Vil 

Chapter  VI. — Directors. 

63.  Number  and  Authority. 

64.  Qualifications. 

65.  Vacancies. 

66.  Classification. 

67.  Regular  Meetings. 

68.  Special  Meetings. 

69.  Notice  of  Meetings. 

70.  Quorum. 

71.  Election  of  Officers. 

72.  Compensation  of  Directors. 

73.  Power  to  Pass  By-Laws. 

74.  Executive  Committee. 

75.  Corporation  Offices. 

76.  Order  of  Business. 

77.  Liabilities  of  Directors  under  New  York  Law. 

78.  Liabilities  of  Directors  under  New  Jersey  Law. 

79.  Liabilities  of  Directors  under  Common  Law. 

80.  General. 

Chapter  VII.— Officers. 

81.  Enumeration,  Election  and  Qualifications. 

82.  Vacancies  and  Removals. 

83.  The  President. 

84.  The  Vice-President. 

85.  The  Secretary. 

86.  The  Treasurer. 

87.  Managing  Director. 

88.  General  Manager. 

89.  Counsel. 

90.  Liabilities  of  Officers. 

91.  General. 

Chapter   VIII. — Dividends   and   Finance. 

:  92.  Dividends. 

93.  Reserve  Fund. 

94.  Debt. 

95.  Bank  Deposits. 

96.  Surplus. 

Chapter  IX. — Sundry  Provisions. 


&  97.  Corporate  Seal. 

98.  Penalties. 

99.  Amendments. 

100.  Parliamentary  Law. 

101.  General. 


Vlll  TABLE   OF    CONTENTS. 

PART   III.— PROCEDURE. 
Chapter  X. — Stockholders'  Annual  Meeting. 

§  102.  Preliminaries. 

103.  Opening  the  Meeting. 

104.  Roll  Call. 

105.  Proof  of  Notice. 

106.  Reading  of  Minutes. 

107.  Annual  Reports. 

108.  Election  of  Directors. 

109.  Other   Business. 
no.  Adjournment. 

in.  Signing  the  Minutes. 
112.  General. 

Chapter  XI.— Stockholders'  Special  Meeting. 

§  113.  Preliminaries. 

114.  Opening  the  Meeting. 

115.  Roll  Call. 

116.  Proof  of  Call  and  Notice. 

117.  Special  Business. 

118.  Disposal  of  Special  Business. 

119.  Adjournment. 

120.  General. 

Chapter    XII. — Directors'    Regular    Meeting. 

§  121.  Preliminaries. 

122.  Opening  the  Meeting. 

123.  Proof  of  Notice. 

124.  Reading  of  Minutes. 

125.  Reports. 

126.  Unfinished  Business. 

127.  New  Business. 

128.  Adjournment. 

129.  General. 

Chapter  XIII. — Directors'  Special  Meeting. 

§  130.  Preliminaries. 

131.  Opening  the  Meeting. 

132.  Proof  of  Call  and  Notice. 

133.  Special  Business. 

134.  Disposal  of  Special  Business. 

135.  Adjournment. 

136.  General. 


TABLE  OF  CONTENTS. 


Chapter    XIV.— Minutes. 


ix 


§  137.  The  Minute  Book. 

138.  Contents  of  Minute  Book. 

139.  Forms  for  Minutes. 

140.  Amendment  of  Minutes. 

141.  Taking  Proceedings. 

142.  Motions  and  Resolutions. 

143.  Outline  Minutes. 

144.  "  Cut  and  Dried  Minutes." 


Chapter  XV. — Corporation    Books. 


§  145.  Treasurer's  Books. 

146.  Secretary's  Books. 

147.  Stock  Certificate  Book. 

148.  Transfer  Book. 

149.  Stock  Book. 

150.  Stock  Ledger. 

151.  General. 


Chapter  XVI.— Sundry   Duties  of  the  Secretary. 

§  152.  Execution  of  Contracts. 

153.  Reports  and  Statements. 

154.  Tax  Reports. 

155.  Corporate  Calendar. 

156.  Finale. 


PART  IV.— FORMS. 

Chapter  XVII.— Subscription  Lists. 

Form. 

1.  Subscription  List.     Simple  Form. 

2.  Subscription  List.     Preliminary  Payment  to  Trustee. 

3.  Subscription  List.     Agreement  with  Promoters. 

4.  Subscription  Blank.     Individual. 

5.  Subscription  List.     Preferred  Stock  with  Bonus. 

6.  Subscription  Blank.     After  Organization. 

Chapter   XVIII.— Receipts   for   Subscriptions. 

Form. 

7.  Trustee's  Receipt. 

8.  Treasurer's  Receipt. 

9.  Assignment  of  Treasurer's  Receipt. 
10.  Instalment  Certificate  or  Scrip. 


X  TABLE  OF  CONTENTS. 

Form. 

11.  Endorsement  for  Instalment  Payments. 

12.  Assignment  of  Instalment  Certificate. 
120.  Assignment  of  Instalment  Receipt. 

Chapter  XIX.— Stock   Certificates. 

Form. 

13.  Stock  Certificate  with  Stub. 

14.  Usual  Form  of  Stock  Certificate  Stub. 

15.  Preferred  Stock  Certificate. 

16.  Preferred  Stock  Certificate.     Special  Form. 

17.  Assignment  in  Blank  of  Stock  Certificate. 

18.  Assignment  of  Stock  Certificate.     Complete. 

Chapter  XX. — Charter  Forms. 

Form. 

19.  New  York  Charter. 

20.  New  Jersey  Charter. 


Chapter  XXI.— By=Laws. 

Form. 

21.  By-Laws.     Short  Set. 

22.  By-Laws.     Long  Set. 

Chapter   XXII.— Proxies. 

Form. 

23.  Simple  Proxy.     Unlimited. 

24.  Simple  Proxy.    Time  Limited. 

25.  Simple   Proxy.     Particular  Meeting. 

26.  Formal  Proxy.     Annual  Meeting. 

27.  Formal  Proxy.    For  Specific  Action. 

28.  Corporate  Proxy. 

29.  Trustee's  Proxy. 

30.  Revocation  of  Proxy. 

Chapter  XXIII.— Motions. 

Form. 

31.  To  Receive  and  File  Treasurer's  Report. 

32.  To  Pay  Bills. 

33.  To  Pay  Disputed  Account. 

34.  To  Purchase  Engines. 

Chapter    XXIV.— Resolutions. 

Form. 

35.  To  Open  Bank  Account.     (Directors'.) 

36.  To  Authorize  Execution  of  Contract.     (Directors'.) 

37.  To  Declare  Dividend.     (Directors'.) 


TABLE  OF  CONTENTS.  ; 

Form. 

38.  To  Appoint  Managing  Directors.     (Directors'.) 

39.  To  Call  Special  Meeting  of  Stockholders.     (Directors'.) 

40.  To  Ratify  Sale  of  Property.     (Directors'.) 

41.  To  Authorize  Sale  of  Entire  Assets.     (Stockholders'.) 

42.  To  Authorize  Sale  of  Entire  Assets.    Conditional.     (Stockholders'.) 

43.  To  Sell  Entire  Assets.     (Directors'.) 

44.  To  Authorize  Issuance  of  Stock  for  Property.     (Stockholders'.) 

45.  To  Issue  Stock  for  Property.     (Directors'.) 


Chapter   XXV. — Resignations. 

Form. 

46.  Resignation  of  Director. 

47.  Resignation  of  Director.     Effective  on  Acceptance. 

48.  Resignation  of  Director.     Immediate. 

49.  Resignation  of  Director.    Future  Date. 

50.  Resignation  of  President. 

51.  Resignation  of  President.    Conditional. 

52.  Resignation  of  Treasurer. 


Chapter  XXVI.— Notices. 

Form. 

53.  Notice  of  Stock  Assessment. 

54.  Waiver  of  Assessment  Notice.     New  Jersey. 

55.  Notice  of  Dividend. 

56:  Notice  of  Dividend.    Preferred  Stock. 

57.  Notice  of  Election  as  Director. 

58.  Notice  of  Election  as  Director.     Requesting  Acceptance. 

59.  Notice  of  Election  as  General  Manager. 


Chapter  XXVII.— Exchange  of  Property  for  Stock. 

Form. 

60.  Proposal  to  Exchange    Property   for   Stock. 

61.  Proposal   to    Exchange    Property    for    Stock.      With    Assignment   of 

Subscriptions. 


Chapter  XXVIII.— Meetings. 

Form. 

62.  Order  of  Business.     Stockholders'  Meetings. 

63.  Order  of  Business.     Directors'  Meetings. 

64.  Alphabetical  List  of  Stockholders.     New  Jersey. 

65.  Secretary's  List  of  Stockholders. 

66.  Outline  Minutes  for  Annual  Meeting. 


Xll  TABLE  OF  CONTENTS. 

Chapter  XXIX. — Inspectors'  Oaths  and  Certificates. 

Form. 

67.  Oath  of  Inspectors.    New  York. 

68.  Inspectors'  Certificate  of  Election.    New  York. 

69.  Oath  of  Inspectors.     New  Jersey. 

70.  Inspectors'  Certificate  of  Election.    New  Jersey. 

Chapter  XXX. — Annual  Reports. 

Form. 

71.  President's  Annual  Report. 

72.  Treasurer's  Annual  Report. 

73.  Report  of  Committee  on  By-Laws. 

Chapter   XXXI.— Calls  and   Waivers. 

Form. 

74.  First  Meeting  of  Stockholders.    Short. 

75.  First  Meeting  of  Stockholders.    Full  Form. 

76.  First  Meeting  of  Directors. 

77.  Special  Meeting  of  Stockholders. 

78.  Special  Meeting  of  Directors. 

79.  Special  Meeting  of  Directors.    By  Consent. 

Chapter  XXXII.— Calls. 

Form. 

80.  President's  Call  for  Special  Meeting  of  Stockholders. 

81.  Directors'  Call  for  Special  Meeting  of  Stockholders. 

82.  Stockholders'  Request  for  Special  Meeting  of  Stockholders. 

83.  President's  Endorsement  of  Stockholders'  Request. 

84.  President's  Call  for  Special  Meeting  of  Directors. 

Chapter  XXXIII.— Notices  of  Meetings. 

Form. 

85.  Special  Meeting  of  Stockholders. 

86.  Special  Meeting  of  Stockholders.    Publication. 

87.  Annual  Meeting  of  Stockholders. 

88.  Annual  Meeting  of  Stockholders.    Publication. 

89.  Special  Meeting  of  Directors. 

90.  Regular  Meeting  of  Directors. 

Chapter  XXXIV.— Minutes  of  First  Meetings. 

Form. 

91.  Minutes  of  First  Meeting  of  Stockholders. 

92.  Entry  in  Minutes  for  Election  of  Directors. 

93.  Entry  in  Minutes  for  Election  of  Directors.    Formal. 

94.  Minutes  of  First  Meeting  of  Directors. 


TABLE   OF   CONTENTS.  XU1 

Chapter  XXXV.— Minutes  of  Special  Meetings. 

Form. 

95.  Minutes  of  Special  Meeting  of  Stockholders. 

96.  Minutes  of  Adjourned  Meeting  of  Stockholders. 

97.  Minutes  of  Directors'  Special  Meeting. 

Chapter  XXXVI.— Minutes  of  Regular  Meetings. 

Form. 

98.  Annual  Meeting  of  Stockholders. 

99.  Regular  Meeting  of  Directors. 

Chapter  XXXVII.— Corporate  and  Official  Signatures. 

P'crm. 

100.  Official  Signature. 

101.  Official  Signature.    Complete. 

102.  Stamp  for  Corporate  Signature. 

103.  Corporate  Signature.    Formal. 

104.  Corporate  Signature.    Seal  attested. 

105.  Testimonium  Clause.    Corporate  Signature. 

106.  Testimonium  Clause.    Two  Corporate  Signatures. 

107.  Testimonium  Clause.    Corporate  and  Individual  Signatures. 

108.  Testimonium  Clause.    By  Agent. 

109.  Corporate  Receipt.    Official  Signature. 
no.  Corporate  Receipt.    Formal  Signature. 

Chapter  XXXVIII.— Commercial  Paper. 

Form. 

in.  Corporate  Note.    Signature  by  President. 

112.  Corporate  Note.    Signature  by  Treasurer. 

113.  Corporate  Note.    Collateral  Security. 

114.  Corporate  Draft.    Formal  Signature. 

115.  Check.    Corporate  Signature. 

116.  Check.    Corporate  Signature.    Countersigned. 

117.  Check.    Official  Signature. 

118.  Check.    Ofiicial  Signature.     Purpose  Stated. 

119.  Check.    Draft  Form. 

120.  Endorsement  of  Check  payable  to  Corporation. 

121.  Endorsement  of  Check  for  Deposit. 

Chapter   XXXIX.— Acknowledgments,   Certificates,    Etc. 

Form. 

122.  Notarial  Acknowledgment.    New  York. 

123.  Notarial  Acknowledgment.    New  Jersey. 

124.  Treasurer's  Affidavit  to  Financial  Statement. 

125.  Secretary's  Certificate  to  Due  Service  of  Notice  of  Meeting. 

126.  Secretary's  Affidavit  to  Due  Service  of  Notice  of  Meeting. 

127.  Secretary's  Affidavit  to  Publication  of  Notice  of  Meeting. 

128.  Certified  Extract  from  By-Laws. 


XIV  TABLE  OF  CONTENTS. 

Form. 

129.  Certified  Resolution.     To  open  Bank  Account. 

130.  Certified  Resolution  authorizing  delivery  of  Bonds. 

131.  Notarial  Acknowledgment  to  Certified  Resolution. 

132.  Certified  Transcript  from    Minutes. 

133.  Certification  of  Minutes.     President  and  Secretary. 

134.  Secretary's  Affidavit  to  Certified  Minutes. 

135.  Secretary's  Certificate  to  Election  of  Treasurer. 

Chapter  XL. — Corporate   Powers  of  Attorney. 

Form. 

136.  To  Collect  Money. 

137.  To  Sell  Machinery. 

138.  To  Make  Delivery  of  Deed. 

139.  To  Manage,  Sell  and  Deed  Land. 

140.  Appointing  General  Agent. 

141.  Appointing  Agent  for  Specific  Purposes. 

Chapter  XLI. — Sundry  Corporate  Instruments. 

Form. 

142.  Bill  of  Sale. 

143.  Assignment  of  Patent.    Individual  to  Corporation. 

144.  Assignment  of  Patent.    Corporation  to  Corporation. 

145.  Assignment  of  Contract. 

146.  Assignment  of  Contract.     Endorsement  Form. 

147.  Chattel  Mortgage.     New  York. 

148.  Deed.    New  York. 

Chapter  XLII. — Corporate  Books  and  Sundry  Forms. 

Form. 

149.  Transfer  Book. 

150.  Stock  Book  and  Stock  Ledger  Combined. 

151.  Stock  Ledger. 

152.  Secretary's  Oath. 

153.  Treasurer's  Bond. 

154.  Indemnity  Bond.     For  Reissued  Certificate. 

Chapter  XLIII. — The  Corporate  Calendar. 

Form. 

155.  Corporate  Calendar.     New  York. 

156.  Corporate  Calendar.    New  Jersey.  x 

Chapter  XLIV.— Bond   Issues. 

Form. 

157.  Stockholders'  Resolution  authorizing  Mortgage. 

158.  Stockholders'  Written  Consent  to  Mortgage. 

159.  Certificate  of  Consent  to  Mortgage. 

160.  Directors'  Resolution  authorizing  Bond  Issue. 

161.  Deed  of  Trust,  including  Forms  of  Bond  and  Coupon 


CORPORATE    MANAGEMENT. 


PART  J.-INTRODUCTORY. 

CHAPTER  I. 
GENERAL  INFORMATION. 


§  i.  The  Corporation. 

A  corporation  is  an  association  of  individuals,  authorized 
by  law  to  act  as  a  whole  under  a  corporate  name  for  some 
particular  purpose  or  purposes.  There  are  corporations  of 
many  kinds,  classified  usually  according  to  their  objects,  as 
social,  financial,  business,  manufacturing,  municipal,  transpor- 
tation, religious,  charitable,  educational  and  the  like.  (See 
§  4.)  The  word  "  company  "  is  commonly  used  as  a  synonym 
for  the  word  "  corporation." 

§  2.  Stock  Corporations. 

A  stock  corporation  is  one  in  which  the  authorized  capital, 
known  as  the  "  capital  stock,"  is  divided  into  shares,  usually 
equal,  and  these  shares,  representing  the  respective  interests  of 
the  owners  of  the  property  of  the  corporation,  ordinarily 
entitle  these  owners  to  vote  at  corporate  meetings  and  to  par- 
ticipate in  proportion  to  their  interests,  both  in  any  corporate 
profits  and  in  the  assets  of  the  corporation  on  its  dissolution. 
These  shares  are  designated  "  stock,"  the  owners  "  stock- 

15 


16  CORPORATE    MANAGEMENT. 

holders."  As  a  general  rule  the  owner  of  a  paid-up  share  of 
stock  is  not  liable  for  any  debts  of  the  corporation.  (See  §§  5, 
1 6,  17;  also  Chaps.  IV  and  XIX.) 

§  3.  Joint  Stock  Companies. 

A  joint  stock  company  is  practically  a  partnership,  author- 
ized by  law  to  act  under  a  corporate  name  and  to  issue  stock 
to  its  members.  This  stock  represents  the  respective  interests 
of  the  members,  but  these  latter  are  liable  for  the  debts  of  the 
company  exactly  as  in  an  ordinary  partnership.  The  arrange- 
ment is  of  doubtful  utility.  In  some  states  the  term  is  loosely 
and  incorrectly  used  to  designate  ordinary  corporations. 

§  4.  Business  Corporations. 

In  New  York  stock  corporations  formed  to  carry  on 
mining,  manufacturing  or  mercantile  enterprises,  are  called 
"  business  corporations,"  to  distinguish  them  from  companies 
formed  for  banking  or  insurance,  which  are  termed  "  moneyed 
corporations,"  and  from  railroad,  telegraph,  ferry  and  other 
like  companies,  which  are  called  "  transportation  corpora- 
tions." These  other  corporations  are  usually  subject  to  much 
stricter  regulations  than  "  business  corporations,"  but  enjoy 
more  extensive  powers.  The  present  volume  treats  specifically 
of  the  management  of  "  business  corporations,"  though  in 
most  particulars  the  rules  are  equally  applicable  to  all  other 
classes  of  stock  corporations. 

§  5.  Stock. 

The  capital  of  a  stock  corporation  is  represented  by  shares 
called  stock,  and  the  whole  of  these  shares  make  up  the  capital 
stock  of  the  company.  The  amount  of  this  capital  stock  is  fixed 
by  its  charter.  Usually  shares  of  stock  may  have  any  face  or 
par  value,  though  under  New  York  laws,  five  dollars  is  the 
minimum,  and  one  hundred  dollars  is  the  maximum.  One 


GENERAL    INFORMATION.  17 

hundred  dollars  is  the  most  common  and  convenient  par  value. 
The  nominal  or  face  value  of  stock  is  fixed  by  the  charter  of 
the  corporation.  The  real  value,  which  may  be  many  times 
more,  or  much  less  than  the  face  value  of  the  stock,  depends 
upon  the  value  of  the  corporate  property  or  the  rate  of  divi- 
dends. One  person  may  own  any  amount  of  stock  in  a  com- 
pany, even  to  the  extent  of  buying  up  all  the  shares  issued. 
(See  §§  2,  1 6,  17;  also  Chaps.  IV  and  XIX.) 

§  6.  Stockholders. 

Subscribers  to  the  capital  stock  of  a  company,  or  pur- 
chasers of  its  stock,  are  stockholders  of  such  company.  Stock- 
holders are  ordinarily  entitled  to  vote  in  corporate  meetings, 
casting  one  vote  for  each  share  of  stock  owned.  They  are  also 
entitled  to  share  proportionately  in  all  profits,  and,  upon  its 
dissolution,  in  the  assets  of  the  company.  (See  Chap.  V.) 

§  7.  Certificates  of  Stock. 

For  convenience,  the  shares  of  a  stock  corporation  are  usu- 
ally represented  by  transferable  "  certificates  of  stock  "  which 
are  issued  to  the  subscribers  or  purchasers  to  evidence  their 
ownership  of  the  stock  acquired.  (See  §§  42,  43,  44.)  Stock 
certificates  are  commonly,  as  a  matter  of  convenience,  referred 
to  as  "  stock."  They  are  not  really  stock,  but  only  evidences 
of  the  ownership  of  stock,  as  a  deed  is  evidence  of  the  owner- 
ship of  land  but  is  not  land  itself. 

§  8.  Formation  of  a  Corporation. 

A  corporation  cannot  be  formed  like  a  partnership,  merely 
by  the  contract  or  agreement  of  the  parties,  but  its  organization 
must  be  expressly  authorized  by  law  and  evidenced  by  a 
charter,  or  certificate  of  incorporation,  granted  by  the  State. 
In  the  different  states  the  formalities  necessary  to  obtain  a 
charter  are  prescribed  by  statute,  and  must  be  exactly  followed. 
(See  Chap.  II;  also  Forms  19  and  20.) 
2 


18  CORPORATE    MANAGEMENT. 

§  9.  The  Corporate  System. 

In  each  state  special  laws  have  been  enacted  for  the  regu- 
lation of  corporations.  In  addition,  under  the  provisions  of 
these  laws,  corporations  may  still  further  limit  and  regulate 
their  own  operations  by  charter  and  by-law  provisions.  Usu- 
ally each  year  the  stockholders  hold  an  annual  meeting  and 
elect  a  board  of  directors  to  manage  the  company  affairs  and 
property.  The  directors,  in  turn,  elect  executive  officers.  The 
directors  pass  motions  and  resolutions  which  the  executive  offi- 
cers carry  into  effect. 

§  10.  Charter. 

The  charter,  or  certificate  of  incorporation,  answers  to  the 
constitution  of  a  state  or  nation.  It  is  the  fundamental  law 
of  the  corporation.  From  it  are  derived  the  existence  and  all 
the  powers  of  the  corporation.  It  should  be  prepared  with 
much  care  and  with  foresight  for  the  needs  of  the  future. 
(See  Chap.  II;  also  Forms  19  and  20.) 

§  ii.  By-Laws. 

By-laws  are  the  permanent  rules  of  corporate  action.  They 
are  usually  adopted  by  the  stockholders  assembled  in  lawful 
meeting,  though  the  board  of  directors  have  this  power  when 
specially  authorized  thereto  by  the  charter,  or  by  the  laws  of 
the  State.  (See  §  29;  also  Part  II.) 

§  12.  Directors. 

The  directors  are  elected  by  the  stockholders  at  the  annual 
meeting,  and  are  the  governing  authority  of  the  corporation. 
The  number  of  directors  is  commonly  prescribed  in  the  charter, 
and  for  convenience  is  usually  an  odd  number,  from  three 
upward.  They  have  charge  of  the  property  and  business  of  the 
company.  In  New  Jersey  the  number  of  directors  is  fixed 
by  the  by-laws.  (See  Chap.  VI.) 


GENERAL    INFORMATION  19 

§  13.  Officers. 

The  officers  of  the  company  are  usually  elected  by  the 
directors  at  their  first  meeting  in  each  year.  The  necessary 
officers  of  a  corporation  are  a  president,  a  treasurer  and  a  sec- 
retary. These  last  two  offices  are  often  filled  by  one  person. 
In  the  larger  corporations,  vice-presidents,  assistants  to  the 
treasurer  and  secretary,  and  other  officers  are  elected.  The 
directors  are  sometimes  referred  to  as  officers  of  the  company, 
though  the  practice  is  liable  to  cause  confusion.  (See  Chap. 
VII.) 

§  14.  Advantages  of  Corporate  Form. 

The  principal  advantages  of  the  corporate  form  are : 

1.  The  limited  liability  of  stockholders  in  case  the  com- 

pany becomes  insolvent.     (See  §  15.) 

2.  The  simplicity  and  convenience  of  the  system  of 

dividing  the  capital  into  shares,  represented  by 
certificates,  and  transferable  by  endorsement. 
(See  §  1 6.) 

3.  The  continuance  of  the  organization,  notwithstand- 

ing the  change,  death  or  insolvency  of  its  mem- 
bers. (See§  17.) 

§  15.  (i)  Limited  Liability. 

A  subscriber  to  the  stock  of  a  corporation  is  liable  for  the 
debts  of  the  company  to  the  unpaid  par  value  of  his  stock. 
But  having  once  paid  this  amount  his  stock  becomes  "  full- 
paid,"  and,  as  a  general  rule,  he  is  no  longer  liable  for  any 
debts  or  obligations  of  the  company.  Neither  is  anyone  who 
thereafter  buys  such  stock  liable,  as  once  full-paid  it  is  always 
full-paid.  This  is  the  great  advantage  of  corporate  invest- 
ments, rendering  it  possible  for  a  man  to  engage  in  a  corporate 
enterprise  and  know  at  all  times  exactly  how  much  he  is  risk- 
ing. In  a  partnership,  on  the  contrary,  each  partner,  no  mat- 
ter how  small  his  interest,  is  liable  for  every  debt  of  the  firm 
incurred  while  he  is  a  member  thereof. 


80  CORPORATE    MANAGEMENT. 

§  1 6.  (2)   Convenience  of  Stock. 

An  interest  in  a  corporation  is  represented  by  transferable 
certificates,  by  means  of  which  a  stockholder  may  readily  sell 
this  interest  in  whole  or  in  part,  or  use  it  as  collateral  upon 
which  to  borrow  money.  In  a  partnership,  on  the  contrary,  it 
is  difficult  for  a  partner  to  sell  his  interest,  and  impossible  for 
him  to  use  it  as  collateral. 

§  X7-  (3)  Permanence. 

By  means  of  the  system  of  stock  shares,  the  members  of  a 
corporation  may  continually  change,  while  the  company 
remains  unaffected.  No  disagreement,  disability  or  insolv- 
ency of  its  stockholders  need  affect  a  corporation.  To  a  part- 
nership anything  of  the  kind  is  fatal.  A  corporation,  unless 
it  voluntarily  dissolves,  becomes  insolvent,  or  the  period  of 
existence  fixed  by  its  charter  expires,  goes  on  forever.  Because 
of  this  stability,  many  enterprises  are  never  undertaken  except 
under  a  corporate  organization. 


CHAPTER  II. 
THE   CHARTER. 

§  1 8.  The  Charter. 

The  foundation  for  a  corporation  is  the  charter  granted  by 
the  State.  (See  Forms  19  and  20.)  This  instrument  is  also 
known  as  the  certificate  of  incorporation  or  the  articles  of  asso- 
ciation. Legally  there  is  no  difference  in  the  terms.  In  this 
work,  the  word  charter  is  generally  used,  because  it  is  the  oldest 
term  and  also  the  shortest.  The  formalities  incident  to  secur- 
ing a  charter  vary  slightly  in  the  different  states.  The  organi- 
zation fees  vary  widely.  In  all  cases  where  any  values  are 
involved,  as  a  matter  of  ordinary  prudence,  the  charter  should 
be  drawn  by  a  competent  lawyer. 

§  19.  Parties. 

The  parties  applying  for  a  charter  must  be  natural  persons 
of  full  age,  and  usually  some  proportion  of  the  number  must 
be  citizens  of  the  state  in  which  application  is  made.  Minors, 
partnerships,  or  other  corporations,  would  not  be  competent 
parties,  although  they  could  hold  stock  after  the  corporation 
was  formed.  The  minimum  number  of  applicants  is  usually 
three.  Each  must  subscribe  for  one  or  more  shares  of  stock, 
and  all  must  sign  and  acknowledge  the  certificate  of  incorpora- 
tion. These  applicants  are  termed  "  Incorporators." 

§  20.  Purposes. 

The  purposes  for  which  the  incorporation  is  to  be  formed 
must  be  set  forth  in  the  charter,  and  must  be  such  as  are  allowed 
by  the  laws  of  the  State.  Ordinary  business  corporations  are 

21 


22  CORPORATE    MANAGEMENT. 

allowed  much  latitude  in  stating  their  purposes,  and  are  not 
confined  to  one  business  or  line  of  activity.  In  New  York  and 
New  Jersey  almost  the  only  limitation  is  that  the  charter  pur- 
poses must  not  extend  to  banking,  insurance,  transportation, 
and  those  other  similar  businesses,  which  are  required  to  be 
chartered  under  special  laws  and  with  special  formalities. 

§  21.  Execution  of  Charter. 

The  execution  of  the  certificate  of  incorporation  by  the 
incorporators  is  the  first  step  towards  organization  under  the 
laws  of  most  of  the  states.  A  charter  under  the  laws  of  New 
York,  in  the  simplest  form,  filled  out  and  executed,  is  given  in 
Part  IV.,  Form  19.  Form  20,  immediately  following,  gives 
the  New  Jersey  form.  With  slight  changes  this  is  the  charter 
form  used  in  most  of  the  states.  It  is  signed  by  the  incorpora- 
tors and  then  acknowledged  before  some  competent  officer. 

§  22.  Amendment  of  Charter. 

The  amendment  of  a  charter  usually  requires  as  much  or 
more  formality  than  the  securing  of  the  original  charter,  and 
requires  the  services  of  a  competent  attorney.  In  New  York 
the  formalities  vary  with  the  nature  of  the  amendment,  as 
follows : 

To  change  the  corporate  name  requires  a  petition  to 
some  court  having  jurisdiction,  and  after  a  hearing,  the 
change  will  be  authorized  by  an  order  of  the  court,  pro- 
vided no  reason  is  shown  for  a  refusal  of  the  request. 

To  alter  or  extend  the  business  requires  an  amended 
certificate  executed  by  a  majority  of  the  directors,  stating 
that  the  same  has  been  authorized  by  the  holders  of  at 
least  three-fifths  of  the  capital  stock  at  a  meeting  called  in 
the  statutory  manner. 

To  authorize  the  issue  of  preferred  stock,  the  holders 
of  two-thirds  of  the  capital  stock  must  vote  in  favor  of  the 
issue. 

To  increase  or  decrease  the  number  of  shares  without 
increasing  or  decreasing  the  capital  stock  requires  also  a 
two-thirds  stock  vote. 


THE    CHARTER.  23 

To  change  the  number  of  directors  or  to  change  the 
place  of  business  requires  a  majority  vote  of  all  the  stock. 
To  increase  or  reduce  the  capital  stock  likewise  re- 
quires a  majority  stock  vote,  or  it  can  be  accomplished  by 
the  unanimous  written  consent  of  all  the  stockholders, 
without  any  meeting. 

In  all  these  cases,  the  proper  certificate  or  order  must  be 
filed  in  the  same  offices  as  the  original  charter,  and  the  proper 
fees  paid  in  each  case. 

In  New  Jersey  the  procedure  is  simpler.  If  the  change  is 
to  be  made  after  the  charter  has  been  filed,  but  before  the  com- 
pany has  been  organized,  the  original  incorporators  can  file 
an  amended  certificate  that  will  be  deemed  to  have  the  date  of 
the  original.  After  organization,  if  any  amendment  is  neces- 
sary, the  directors  pass  a  resolution  declaring  such  change 
advisable,  and  if  two-thirds  of  the  stockholders  in  interest  vote 
for  it  at  a  duly  called  meeting,  a  certificate  is  made  out  setting 
forth  the  desired  amendment,  and  is  filed  in  the  same  manner 
as  an  original  charter.  It  is  possible,  however,  to  move  the 
principal  office  to  any  other  place  in  the  State  by  a  two-thirds 
vote  of  the  directors  alone.  In  such  case  a  copy  of  the  resolu- 
tion ordering  such  move  must  be  filed  with  the  Secretary  of 
State.  In  other  states,  the  general  procedure  is  similar,  but 
the  details  must  be  obtained  from  the  laws  of  the  particular 
state. 

In  most  of  the  states  the  statutes  relating  to  corporations 
may  be  obtained  in  pamphlet  form,  or  as  a  small  volume.  The 
officials  of  every  corporation  should  have  convenient  access  to 
such  publication  for  their  own  state. 

§  23.  Filing  Charter. 

In  New  York,  the  charter  after  being  signed  and  acknowl- 
edged as  shown  in  Form  19,  and  after  payment  of  the  proper 
fees,  is  filed  and  recorded  with  the  Secretary  of  State  at 
Albany.  A  duplicate  copy  is  then  filed  with  the  County  Clerk 
of  the  county  where  the  corporation  is  to  have  its  principal 


24  CORPORATE    MANAGEMENT. 

office.  The  Secretary  of  State  acknowledges  the  receipt  of  the 
duly  executed  charter  and  certifies  to  its  filing  as  a  matter  of 
course.  If  paid  for  so  doing,  he  will  also  furnish  a  certified 
copy  of  the  instrument. 

As  soon  as  the  charter  is  filed  and  the  sum  of  five  hundred 
dollars,  or  whatever  greater  sum  may  have  been  named  in  the 
charter  as  the  amount  with  which  the  company  will  begin  busi- 
ness, has  been  paid,  either  in  money  or  property,  the  new  cor- 
poration is  fully  authorized  to  begin  its  operations. 

As  the  directors  for  the  first  year  are  named  in  the  charter, 
a  preliminary  or  "  first "  meeting  of  the  stockholders  is  not 
essential.  Such  meeting  is,  however,  usually  held  for  the  pur- 
pose of  accepting  the  charter,  adopting  by-laws  and  approving 
any  extensive  purchases  or  contracts  necessary  to  start  the  new 
company  in  its  business.  In  most  states  directors  must  be 
elected,  and  this  first  meeting  of  stockholders  is  necessary  be- 
fore the  corporation  can  do  any  business  whatever. 

In  New  Jersey  the  charter  must  be  recorded  with  the. 
County  Clerk  first  and  then  with  the  Secretary  of  State.  As 
the  directors  are  not  named  in  the  charter  it  is  essential  that 
there  be  a  first  meeting  of  stockholders.  (See  §  120;  also 
Forms  91,  92,  93.) 

§  24.  Incidental  Powers. 

In  addition  to  the  powers  expressed  in  the  charter  given  in 
Form  19,  sundry  other  special  powers  might  have  been  specified 
in  additional  articles.  Often  these  powers  are  set  forth  at  great 
length.  In  addition  to  these  special  powers,  however,  and 
whether  specified  in  the  charter  or  otherwise,  every  corporation 
has  inherently  the  power  set  forth  in  the  seven  following  sec- 
tions. These  are  implied  or  incidental  powers  common  to 
every  corporation. 

§  25.  First :  To  Sue  and  be  Sued. 

A  corporation  is  a  legal  entity,  an  artificial  person.  It  can 
therefore  become  a  party  to  a  suit  under  its  corporate  name. 


THE    CHARTER.  86 

This  power  to  institute  suit  under  the  corporate  name,  instead 
of  making  every  member  of  the  corporation  a  party  to  the  liti- 
gation, as  must  be  done  in  a  partnership,  has  always  been 
accounted  a  valuable  corporate  right. 

§  26.  Second:  To  Use  a  Seal. 

The  corporation  seal  is  still  an  important  property,  and  is 
used  on  stock  certificates,  deeds  and  other  important  instru- 
ments, though  its  use  is  not  so  highly  esteemed  as  it  was  in 
former  days.  (See  §§  97,  152;  also  Form  104.) 

§  27.  Third:  To  Buy,  Sell  and  Hold  Property. 

This  power  is  necessary  in  order  to  carry  out  the  corporate 
purposes,  and  is  now  taken  as  a  matter  of  course.  In  some 
states  the  ownership  of  land  by  corporations  is  limited,  and 
generally  a  corporation  is  not  allowed  to  hold  stock  in  another 
corporation.  In  New  York,  a  special  provision  must  be 
inserted  in  the  charter  to  secure  this  last  power.  (See  §  10; 
also  Form  19.)  In  New  Jersey  all  corporations  are  ex- 
pressly empowered  by  statute  to  exercise  this  power. 

§  28.  Fourth :  To  Appoint  Directors,  Officers  and  Agents. 

This  power  is  essential,  as  in  no  other  way  could  the  corpo- 
ration act.  Directors  are  elected  by  the  stockholders.  Officers 
are  appointed  by  the  board  of  directors,  and  other  agents  are 
appointed  either  by  the  board,  or  by  the  officers,  under  instruc- 
tions from  the  board. 

§  29.  Fifth:  To  Make  By-Laws. 

The  charter  is  usually  expressed  in  general  terms  and  does 
not  go  into  detail.  To  supplement  the  charter  provisions  the 
stockholders  have  power  to  pass  by-laws  regulating  the  action 
of  the  directors  and  officers,  and,  generally,  the  management 
of  the  company.  By-laws  should  be  carefully  drawn  and  after- 
wards carefully  observed. 


26  CORPORATE   MANAGEMENT. 

§  30.  Sixth :  To  Dissolve  the  Corporation. 

A  corporation  has  power  to  dissolve  itself  by  the  unanimous 
agreement  or  consent  of  all  its  stockholders.  In  both  New 
York  and  New  Jersey  it  is  further  provided  that  a  corporation 
may  be  dissolved  with  the  consent  of  two-thirds  of  its  stock- 
holders. To  accomplish  this  the  statutory  proceedings  must 
be  closely  followed;  a  stockholders'  meeting  must  be  called  by 
the  directors ;  it  must  be  duly  advertised,  the  stockholders  noti- 
fied, and  their  consent  be  properly  evidenced  to  the  state  author- 
ities. Thereupon  the  directors  are  empowered  to  settle  all  out- 
standing obligations  and  divide  any  remaining  assets  among 
the  stockholders. 

In  event  of  a  corporation's  insolvency,  proper  legal  pro- 
ceedings result  in  the  appointment  of  a  receiver  to  settle  its 
affairs  and  usually  to  terminate  its  existence. 

Failure  to  pay  taxes  due  the  State  is  cause  for  the  forfeiture 
of  the  charter,  by  action  of  the  Attorney  General. 

Many  corporations  fail  in  their  purposes,  and,  having 
neither  assets  nor  liabilities  of  sufficient  amount  to  justify  a 
formal  dissolution,  are  often  simply  abandoned  by  their  stock- 
holders and  officers.  Such  corporations  are  not  dissolved  until 
their  term  of  existence  expires,  or  their  charters  are  forfeited 
by  the  State.  At  any  time  prior  to  the  forfeiture  or  expiration 
of  their  charters,  they  may  be  revived  by  paying  their  delin- 
quent taxes  or  other  liabilities. 

§  31.  Seventh:  To  Do  All  Things  Necessary. 

This  power  includes  most  of  the  other  powers.  Having 
been  given  the  right  to  conduct  some  particular  business,  this 
carries  with  it  the  right  to  do  all  things  necessary  to  carry  on 
that  business.  For  instance,  while  the  right  to  hold  real  prop- 
erty is  not  usually  held  to  be  a  corporate  right,  yet,  if  it  was 
necessary  to  buy  land  for  the  purpose  of  its  authorized  business, 
it  could  do  so.  The  right  has  been  liberally  construed;  and 
to-day  there  are  very  few  things  that  can  be  done  by  a  partner- 


THE    CHARTER.  27 

ship  that  cannot  be  done  by  a  corporation.  Further,  under 
most  of  the  modern  codes  of  corporate  law,  it  is  permitted  to 
draw  the  charter  so  broadly  as  to  secure  almost  any  power  that 
could  possibly  be  desired. 

§  32.  Things  "  Ultra  Vires." 

A  corporation  is  usually  incorporated  for  certain  specified 
purposes.  Later,  its  directors  may  see  opportunities  to  branch 
out  in  other  directions.  If  they  attempt  to  take  advantage  of 
these,  they  are  exceeding  the  corporate  powers  and  may  become 
seriously  involved.  These  things  which  a  corporation  cannot 
do,  which  are  beyond  its  power,  are  termed  in  legal  parlance, 
"ultra  vires."  Owing  to  the  exceedingly  broad  powers  granted 
in  most  modern  charters,  the  doctrine  is  now  of  less  importance 
than  formerly. 

A  corporation's  powers  are  defined  by  its  charter.  When 
it  goes  beyond  these,  its  contracts  are  illegal.  The  corporation 
cannot  enforce  such  contracts  against  others,  although  some- 
times they  may  be  enforced  against  the  corporation.  Directors 
and  officers  may  make  themselves  personally  liable  for  involv- 
ing the  corporation  in  such  transactions.  Creditors  and  stock- 
holders have  the  right  to  object  to  any  action  that  is  beyond 
the  legal  powers  of  the  company.  Those  managing  a  corpora- 
tion should  look  carefully  to  their  charter  and  the  laws  of  the 
State,  and  refrain  from  any  transactions  save  those  that  are 
clearly  authorized  or  necessarily  implied  from  the  powers 
granted. 


PART  II.— CONCERNING  BY-LAWS. 


CHAPTER  III. 
BY-LAWS. 


§  33.  Nature  of  By-Laws. 

By-laws  are  the  permanent  rules  of  a  corporation,  as  dis- 
tinguished from  motions  and  resolutions,  which  usually  apply 
only  to  particular  occasions  and  exigencies.  The  grant  of  a 
charter  confers  without  specific  mention  the  power  to  make 
by-laws,  which  usually  belongs  to  the  stockholders  alone, 
though  of  late  years  it  is  common  to  delegate  more  or  less  of 
this  power  to  the  directors.  The  power  should  be  used  with 
discretion,  for  the  by-laws  are  the  working  rules  of  the  com- 
pany, and  if  carelessly  drawn  may  seriously  impede  necessary 
business  operations,  or,  on  the  other  hand,  fail  to  restrain  reck- 
less or  improvident  action  of  directors  and  officers. 

By-laws  must  be  reasonable  and  equitable  or  they  are  of  no 
effect.  For  instance,  a  by-law  allowing  certain  members  of  the 
corporation  priority  in  the  payment  of  dividends  could  not  be 
enforced.  It  is  not  in  the  power  of  the  majority  to  favor  them- 
selves or  to  oppress  the  minority  by  unjust  and  unfair  regu- 
lations. 

By-laws,  as  a  matter  of  course,  must  conform  to  the  consti- 
tution and  statutes  of  the  state  and  to  the  provisions  of  the 
charter  of  the  company.  If  a  by-law  conflicted  with  these 
higher  authorities  it  would  be  void. 

§  34.  Making  of  By-Laws. 

A  set  of  by-laws  is  usually  adopted  by  the  stockholders  at 
their  first  meeting,  and  other  by-laws  added  from  time  to  time 
as  the  necessity  arises.  The  stockholders,  in  duly  called  stock- 

28 


BY-LAWS. 


holders'  meeting,  alone  have  power  to  adopt  by-laws,  unless  the 
laws  of  the  state  or  the  provisions  of  the  charter  give  the 
directors  similar  power.  In  New  York,  by  statute  provision, 
the  directors  of  the  company  for  the  first  year  must  be  named 
in  the  charter  and  are  given  the  right  to  adopt  by-laws,  subject 
always  to  any  by-laws  adopted  by  the  stockholders.  This 
enables  a  New  York  corporation,  where  desirable,  to  commence 
business  without  a  preliminary  stockholders'  meeting.  In  New 
Jersey  provision  may  be  made  in  the  charter  giving  the  direct- 
ors power  to  make  and  alter  by-laws,  but  by-laws  so  made  may 
be  altered  or  repealed  by  the  stockholders. 

By-laws  should  be  carefully  drawn,  formally  adopted  and 
recorded  accurately  in  the  minute  book.  Due  regard  should  be 
had  in  making  by-laws  to  the  nature  of  the  company  business, 
the  size  of  the  corporation,  the  rights  of  the  minority  and  the 
relation  of  the  officers  and  directors  to  the  business.  For 
instance,  if  all  or  nearly  all  of  the  stock  were  owned  by  a  few 
men,  who  composed  the  board  of  directors,  held  all  the 
offices,  and  devoted  their  entire  time  to  the  company  business, 
the  by-laws  need  be  but  few  and  simple;  while,  if  the  stock- 
holders were  numerous  and  widely  scattered,  if  there  were  a 
large  board  of  directors  meeting  but  seldom,  if  the  president, 
and  possibly  the  remaining  officers,  were  engaged  in  other 
businesses,  the  actual  work  of  the  corporation  being  conducted 
almost  entirely  by  salaried  agents  and  employees,  the  by-laws 
should  be  full,  explicit  and  carefully  adapted  to  the  particular 
circumstances  of  the  corporation. 

In  each  state,  many  matters  relating  to  corporate  manage- 
ment have  been  provided  for  by  statute.  It  is  well  to  have  the 
substance  of  all  these  laws  embodied  in  the  by-laws.  The  stat- 
ute regulations  are  not  thereby  strengthened  in  any  way,  or 
made  more  binding  on  the  company,  but  they  are  more  acces- 
sible and  are  much  less  likely  to  be  disregarded  than  if  their 
observance  depended  solely  upon  the  secretary's  knowledge  of 
the  law.  (See  §§  n,  29.) 


30  CORPORATE    MANAGEMENT 

§  35.  Amendment  of  By-Laws. 

Provision  is  usually  made  in  the  by-laws  for  their  repeal 
or  amendment.  Unless  otherwise  provided  by  statute,  charter 
or  by-laws,  they  may  always  be  amended  by  the  vote  of  a 
majority  of  the  stockholders  at  any  regular  meeting,  or  at  any 
special  meeting  duly  called  for  that  purpose. 

Under  the  New  York  law,  directors  have  no  power  to  alter, 
amend  or  repeal  any  by-laws  passed  by  the  stockholders.  In 
New  Jersey  it  would  seem  that  the  charter  may,  by  express 
provision,  confer  such  power  upon  the  directors.  This  is  done 
because  in  the  very  large  corporations  characteristic  of  New 
Jersey,  where  the  stockholders  are  numerous  and  too  widely 
scattered  for  convenient  assembling,  it  is  considered  expedient 
to  give  the  board  of  directors  more  extensive  powers  than  the 
common  law  allows  or  than  heretofore  granted  by  statute. 

This  innovation  of  the  New  Jersey  laws  alters  the  whole 
former  scheme  of  corporation  management,  under  which  the 
by-laws  were  expressly  designed  to  be  passed  by  the  stock- 
holders for  the  government,  regulation  and  restraint  of 
directors  and  officers.  While  the  change  may  be  necessary 
and  even  advantageous  for  some  of  the  larger  corporations  of 
New  Jersey,  for  the  smaller  corporations  it  is  not  a  change 
to  the  advantage  of  the  stockholders,  and  the  provisions  men- 
tioned should  be  omitted  from  the  charters  of  such  corpora- 
tions. (See  §§  73,  99.) 

§  36.  Enforcement  of  By-Laws. 

The  most  potent  factor  in  securing  the  observance  of  by- 
laws is  found  in  the  legal  liabilities  and  entanglements  that 
may  ensue  from  their  violation.  Corporate  action  taken  in 
disregard  of  by-law  requirements  is  frequently  illegal  and  void. 
In  such  event  it  may  be  restrained  or  set  aside  by  any  stock- 
holder or  creditor  who  may  choose  to  resort  to  the  courts. 
Also  directors  and  officers  disregarding  the  by-laws  may  render 
themselves  personally  liable  for  damages. 


BY-LAWS.  31 

Direct  penalties  for  the  violation  of  by-law  provisions  are 
unsatisfactory  and  very  difficult  of  enforcement,  and  the  con- 
siderations mentioned  are  generally  relied  upon  to  secure 
observance  of  the  by-laws  in  all  important  matters.  The 
smaller  omissions  and  negligences  on  the  part  of  directors  and 
officials  are  usually  passed  over,  or  their  recurrence  prevented 
by  the  election  of  more  reliable  officials  at  the  first  convenient 
opportunity. 

Sometimes,  however,  direct  penalties  in  the  shape  of  fines 
are  imposed  for  any  violation  of  the  by-laws.  In  New 
Jersey  the  statutes  expressly  provide  that  fines  not  exceeding 
twenty  dollars  may  be  imposed  for  any  breach  of  by-law  provi- 
sions. Such  penalties  may  be  enforced  by  action  at  law,  or  by 
charging  the  amount  against  the  offender  and  deducting  it 
from  any  dividends  or  salary  thereafter  due  him. 

It  should  be  noted  that  no  stock  corporation  has  the  right  to 
expel  a  stockholder,  or  deprive  him  under  any  circumstances 
of  his  rights  of  membership  in  the  corporation.  Such  penal- 
ties, if  imposed,  could  not  be  enforced.  (See  §  98.) 


§  37.  Non-observance  of  By-Laws. 

Every  stockholder,  and,  in  many  cases,  every  creditor  of  a 
corporation  has  the  right  to  demand  that  the  business  and  pro- 
cedure of  the  corporation  shall  be  conducted  according  to  the 
charter  and  by-laws  of  the  company  and  the  laws  of  the  state. 
Hence  any  irregularity  may  lead  to  legal  interference,  and, 
in  some  cases,  to  the  personal  liability  of  the  offending  officer 
or  director.  For  instance,  one  stockholder,  not  duly  notified 
of  a  special  meeting  of  the  stockholders,  may  come  in  later 
and  have  the  entire  proceedings  overturned.  Or  again,  any 
director  voting  to  declare  a  dividend  greater  than  can  be  paid 
from  the  surplus  profits  of  the  corporation  makes  himself  per- 
sonally liable  to  the  company  for  any  loss  occasioned  thereby. 
Similarly,  any  other  irregularity  or  failure  to  observe  statutory 


82  RPORATK   MANAGEMENT. 

and  by-law  requirements  may  cause  serious  complications  and 
personal  responsibility. 

On  the  other  hand,  where  a  corporation  is  prosperous  and 
free  from  indebtedness,  and  when  all  its  stockholders  are  satis- 
fied and  willing  to  expedite  the  transaction  of  business,  such 
accurate  and  formal  compliance  with  all  the  corporate  require- 
ments is  not  so  essential.  In  such  case,  the  formal  regulations 
may,  by  common  consent,  be  waived  at  convenience,  and  the 
corporation  conducted  with  the  same  simplicity  and  informality 
as  a  partnership.  In  practice,  many  irregularities  in  corpora- 
tion organization  and  procedure  are  passed  over  and  legalized 
by  the  acquiescence  or  assent  of  all  the  parties  concerned.  Also, 
unless  prompt  action  is  taken  by  any  stockholder  who  objects  to 
an  irregularity,  such  stockholder  will  be  deemed  to  acquiesce, 
and  will  be  estopped  from  subsequent  interference. 

§  38.  Classification  of  By-Laws. 

By-laws  should  be  so  grouped  that  those  relating  to  any 
matter  may  be  readily  found.     A  convenient  classification,  as 
follows,  has  been  adopted  in  this  work : 
I.— Stock. 
II. — Stockholders. 
III. — Directors. 
IV.— Officers. 

V. — Dividends  and  Finance. 
VI. — Sundry  Provisions. 

This  arrangement  has  been  followed  in  the  by-laws  given 
in  the  present  volume,  and  also  in  the  commentaries  upon  the 
subject  matter  of  these  by-laws. 

The  short  set  of  by-laws  given  in  Part  IV.  of  the  present 
work  (Form  21)  is  intended  for  the  use  of  smaller  corpora- 
tions, where  simple  regulations  are  sufficient.  The  extended 
set  which  follows  these  shorter  by-laws  (Form  22)  has  been 
selected  and  collated  from  the  by-laws  used  by  some  of  the  best 
organized  corporations  in  the  Eastern  States,  and  with  suitable 


BY-LAWS.  33 

modifications  may  be  adapted  to  the  needs  of  any  modern  busi- 
ness corporation. 

§  39.  Record  of  By-Laws. 

When  by-laws  have  been  adopted  it  is  the  duty  of  the  secre  - 
tary  to  have  them  recorded  at  length  in  the  minute  book.  Tn 
addition,  when  it  can  be  done  without  too  much  expense,  or 
where  the  size  or  importance  of  the  corporation  justifies  the 
expense,  the  charter  and  by-laws  should  be  printed  and  each 
stockholder  be  provided  with  a  copy.  (See  §  138.) 


CHAPTER  IV. 
STOCK. 


(BY-LAWS.) 
§  40.  Introductory. 

The  by-laws  of  a  corporation  are  the  working  rules  under 
which  it  operates.  Usually  the  by-laws  embody  a  large  pro- 
portion of  the  common  and  statutory  law  relating  to  corpora- 
tions, as  well  as  the  specific  regulations  by  which  the  particular 
corporation  is  controlled.  Hence,  any  work  treating  of  the 
management  of  corporations  must  of  necessity  treat  the  subject 
of  by-laws  very  fully. 

As  a  convenient  method  of  treating  the  subject,  this  chapter 
and  the  five  succeeding  ones  are  devoted  to  the  careful  consid- 
eration of  a  complete  set  of  by-laws  arranged  for  the  govern- 
ment of  a  New  York  corporation.  (The  same  by-laws,  with 
such  slight  changes  as  fit  them  for  the  purposes  of  a  New  Jer- 
sey corporation,  are  given  in  Form  22,  Chapter  XXI. )  These 
by-laws  are  classified  according  to  the  plan  given  in  Section  38, 
in  the  preceding  chapter,  and  a  chapter  is  devoted  to  each 
group  and  a  section  to  each  by-law.  To  the  comment  and 
explanation  given  in  the  text  are  added  references  to  those 
other  parts  of  the  book  where  the  same  subject  is  considered 
in  other  connections,  and  to  such  forms  in  Part  IV  as  relate 
to  the  same  matter.  To  obtain  a  full  knowledge  of  any  par- 
ticular subject,  these  references  should  be  consulted. 

§  41.  Kinds  of  Stock. 

Stock  is  variously  distinguished  as  common,  preferred, 
treasury,  guaranteed  and  the  like.  Preferred  and  treasury 

34 


STOCK.  36 

stock  will  be  discussed  under  their  respective  heads  in  Sections 
47  and  48  of  this  chapter. 

Common  Stock  is  the  general  or  ordinary  stock  of  a  com- 
pany, with  neither  special  privileges  nor  restrictions.  Unless 
preferred  or  other  special  stock  is  issued  by  the  company,  all 
of  its  stock  is  common  stock. 

Guaranteed  Stock  is  stock  of  one  corporation,  the  payment 
of  dividends  on  which  has  been  guaranteed  by  another  corpora- 
tion. It  is  an  arrangement  common  among  railroad  compa- 
nies. The  term  is  also  applied  to  preferred  stock  when  the 
dividends  are  cumulative.  (See  §47.) 

Full  Paid  Stock  is  that  the  par  value  of  which  has  been 
fully  paid  in  to  the  company  in  cash  or  which  has  been  issued 
at  its  par  value  in  payment  for  property,  without  fraud  and  in 
good  faith.  The  issuance  of  stock  for  property  in  this  man- 
ner is  permitted  under  the  laws  of  New  York,  New  Jersey  and 
most  other  states.  (See  Forms  60,  61.)  Certificates  of  full 
paid  stock  should  bear  the  words  "  Full  paid  and  non-assessa- 
ble "  plainly  printed  upon  the  face  of  the  certificate.  The 
holders  of  such  stock  would  not  be  liable  to  assessments  nor  to 
creditors  of  the  company  in  case  of  insolvency.  ( See  §  43. ) 

Unissued  Stock  is  in  itself  a  nullity,  and  until  issued  repre- 
sents nothing.  It  is  not  treasury  stock,  and  is  no  more  an 
asset  of  the  company  than  an  unissued  promissory  note  is  an 
asset  of  an  individual  or  firm. 

Issued  and  Outstanding  Stock  is  that  which  has  been 
bought,  or  subscribed  for  and  the  subscriptions  accepted  by  the 
company,  or  which  has  been  properly  exchanged  for  property, 
labor,  services  or  other  values.  Usually  it  is  stock  for  which 
certificates  have  been  issued  and  delivered  to  the  stockholders, 
though  the  issue  of  certificates  is  not  necessary  to  make  the 
stock  "  issued  and  outstanding."  The  parties  entitled  to  cer- 
tificates are  stockholders,  with  all  the  rights  of  stockholders; 
before  they  receive  their  certificates.  The  issue  of  certificates 
and  the  issue  of  stock  are  separate  and  distinct,  and  should  not 
be  confused. 


36  CORPORATE    MANAGEMENT. 

For  bookkeeping  purposes,  issued  stock  is  regarded  as  a 
liability  of  the  company,  and  the  subscriptions,  cash  or  prop- 
erty received  therefor  should  be  an  equivalent  asset.  (See 

§43-) 

Watered  Stock  is  stock  issued  without  payment  or  without 
full  payment  therefor,  in  cash  or  in  property.  Sometimes 
watered  stock  is  issued  as  a  stock  dividend.  If  a  stock  were 
paying  12  per  cent.,  as  much  more  stock  might  be  issued  to 
the  stockholders  as  a  stock  dividend.  Each  stockholder  would 
then  have  twice  as  many  shares,  but  his  stock  would  be  a  6 
per  cent,  stock.  In  many  states  such  issues  of  "  fictitiously 
paid-up  "  stock  are  prohibited.  Generally  the  term  is  applied 
to  any  stock  for  which  the  corporation  has  not  received  an 
equivalent  in  assets.  Stock  is  said  to  be  more  or  less  watered, 
according  to  the  amount  of  real  value  behind  it. 

§  42.  Subscriptions. 

"  Subscriptions  to  the  capital  stock  of  the  Company 
must  be  paid  to  the  Treasurer  at  such  times  and  places 
and  in  such  instalments  as  the  Board  of  Directors  may 
by  resolution  require.  If  default  be  made  in  payment, 
such  default  shall  work  forfeiture  of  the  stock  by  the 
method  prescribed  in  the  statutes."  Art.  I,  §  ,  By-laws. 

The  by-law  quoted  would  only  be  used  and  only  applies  to 
those  corporations  whose  capital  is  supplied  by  subscriptions 
to  the  capital  stock,  payable  in  cash,  in  such  instalments  and 
at  such  times  as  the  terms  of  subscription  may  require.  But 
a  limited  number  of  companies  are  so  organized,  most  modern 
corporations  being  formed  to  take  over  an  existing  business, 
a  mine,  a  patent  or  other  property;  and  the  entire  stock  being 
paid  up  at  the  time  of  organization  by  the  assignment  to  the 
corporation  of  the  business  or  property.  In  such  case  there 
could  be  no  capital  stock  paid  by  subscribers  in  instalments, 
and  the  foregoing  by-law  would  be  omitted.  (See  Form  2.) 

Also,  as  the  entire  matter  of  subscriptions  is  usually  closed 
within  a  limited  time  after  the  organization  of  the  company, 


STOCK.  37 

and  is  therefore  a  temporary  matter,  the  procedure  for  collec- 
tion could  very  properly  be  omitted  from  the  by-laws  and  be 
provided  for  by  a  resolution. 

If  a  subscriber  to  stock  defaults  on  his  first  payment,  his 
subscription  would  usually  be  canceled  without  formality  and 
the  matter  ended.  After  payments  have  been  made,  the  pro- 
ceedings to  forfeit  such  stock  for  default  in  payment  of  the 
balance  due  are  set  forth  in  the  statutes  at  such  length,  and 
require  such  close  adherence  that  their  inclusion  in  the  by-laws 
is  inexpedient. 

If  used,  the  above  by-law  would  be  Section  I,  Article  i  of 
the  By-laws,  but  it  is  so  seldom  employed  that  the  section  num- 
ber mentioned  is  reserved  for  the  by-law  next  quoted. 

§  43.  Certificates  of  Stock. 

"  Each  stockholder  of  the  Company  whose  stock  has 
been  paid  for  in  full  shall  be  entitled  to  a  certificate  or 
certificates,  showing  the  amount  of  stock  of  the  Company 
standing  on  the  books  in  his  name.  Each  certificate 
shall  be  numbered,  bear  the  signature  of  the  President 
and  Treasurer  and  the  seal  of  the  Company,  and  be 
issued  in  numerical  order  from  the  stock  certificate  book. 
A  full  record  of  each  certificate  of  stock,  as  issued,  must 
be  entered  on  the  corresponding  stub  of  the  stock  certifi- 
cate book."  Art.  I,  §  I,  By-laws. 

Stock  certificates  are  usually  bound  together  in  a  stock 
certificate  book  and  numbered  consecutively.  (§  147.)  For 
the  arrangement  of  certificate  and  stub  see  Forms  13  to  18. 
The  stock  certificate  book  is  kept  by  the  secretary,  whose  duty 
it  is  to  prepare  the  certificates  and  affix  the  seal.  In  New 
Jersey  the  statutes  require  the  signature  of  the  president  and 
treasurer  to  stock  certificates.  In  most  states  the  matter  is 
discretionary,  and  it  is  often  provided  that  the  secretary  shall 
sign  certificates  with  the  president. 

Great  care  should  be  taken  to  avoid  mistakes  in  issuing 
stock.  The  entries  on  the  stub  should  be  made  before  the 
certificate  is  separated.  Both  the  name  and  the  address  of  the 


38  CORPORATE    MANAGEMENT. 

party  in  whose  name  a  certificate  is  issued  should  appear  on 
its  stub.  Whoever  receives  the  certificate  should  receipt  for 
same  on  the  stub.  As  it  is  the  duty  of  the  secretary  to  keep  a 
correct  list  of  the  stockholders  of  the  company,  he  should  never 
under  any  circumstances  issue  stock  certificates  with  the  space 
for  name  left  blank  to  be  filled  in  later. 

Stock  certificates  should  never  be  issued  until  the  stock 
they  represent  has  been  paid  for  in  full,  and  then  they  may  prop- 
erly be  marked  "  full-paid  and  non-assessable."  Should  stock 
certificates  be  issued  wrongly  marked  "  full-paid,"  and  sold  to 
a  bona  fide  purchaser,  without  knowledge  on  his  part  that  said 
stock  had  not  been  paid  in  full,  they  would  involve  him  in  no 
liability  either  to  the  corporation  or  to  creditors  in  case  of  its 
insolvency. 

The  certificate  is  not  the  stock,  but  only  the  evidence  of  its 
ownership.  Neither  is  the  possession  of  a  certificate  essential 
to  the  enjoyment  of  all  the  rights  of  a  stockholder.  A  stock- 
holder can  vote  and  receive  dividends,  and  hold  office  in  a 
company  before  he  receives  his  certificate  of  stock  or  after  its 
loss  or  destruction.  (See  §  45.)  A  stockholder,  who  has 
paid  in  full  for  his  stock,  has,  however,  a  right  to  a  certificate, 
and  the  courts  will  enforce  its  issuance,  if  necessary.  (See 
§  147;  also  Chap.  XIX.) 

§  44.  Transfers  of  Stock. 

"  Transfers  of  stock  shall  be  made  upon  the  proper 
stock  books  of  the  Company,  and  must  be  accompanied 
by  the  surrender  of  the  duly  endorsed  certificate  or 
certificates  representing  the  transferred  stock.  Surren- 
dered certificates  shall  be  canceled  and  attached  to  the 
corresponding  stubs  in  the  stock  certificate  book,  and 
new  certificates  issued  to  the  parties  entitled  thereto. 
The  stock  books  shall  be  closed  to  transfer  twenty  days 
before  general  elections  and  twenty  days  before  dividend 
days."  Art.  I,  §  2,  By-laws. 

In  transferring  stock  it  is  supposed  that  the  party  to  whom 
it  was  issued  appears  in  person,  and  executes  an  instrument 


STOCK.  89 

of  transfer  upon  the  corporation  transfer  book.  (§  148;  also 
Form  149.)  In  practice,  however,  this  is  but  rarely  done,  the 
person  who  transfers  his  stock  merely  signing  a  combined 
assignment  and  power  of  attorney  in  blank  (usually  printed 
upon  the  back  of  his  certificate  of  stock,  although  it  may  be  a 
separate  paper)  and  delivering  his  certificate  of  stock  to  the 
purchaser.  (See  Form  17.)  The  transferee,  if  he  wishes  to 
make  himself  a  stockholder  of  record,  writes  his  own  name  in 
the  blank  assignment  as  assignee;  and  also  duly  enters  therein 
the  name  of  the  secretary  of  the  company,  his  own  name,  or 
the  name  of  some  other  reliable  person,  as  attorney  to  execute 
the  transfer  upon  the  books  of  the  company.  (See  Form  18.) 
This  attorney,  so  designated,  executes  the  instrument  of  trans- 
fer upon  the  books  of  the  company  (See  Form  149),  and 
surrenders  the  old  instrument  for  cancellation,  the  transferee 
thereupon  becoming  a  stockholder  of  record,  entitled  to  vote 
and  receive  dividends.  A  new  certificate  is  then  issued  by  the 
officials  of  the  company  in  the  name  of  the  transferee  and  the 
transaction  is  complete.  In  New  York,  however,  the  original 
owner  is  not  released  from  liability  as  a  stockholder  until  the 
transfer  of  his  stock  is  entered  in  the  stock  book  as  well.  (See 
§§  147,  148,  149;  also  Form  150.) 

§  45.  Lost  Certificates. 

11  The  Board  of  Directors  may  order  a  new  certificate 
or  certificates  of  stock  to  be  issued  in  the  place  of  any 
certificate  or  certificates  of  the  Company  alleged  to  have 
been  lost  or  destroyed,  but  in  every  such  case  the  owner 
of  the  lost  certificate  or  certificates  shall  first  cause  to  be 
given  to  the  Company  a  bond  in  such  sum,  not  less  than 
the  par  value  of  such  lost  or  destroyed  certificate  or 
certificates  of  stock,  as  said  Board  may  direct,  as  indem- 
nity against  any  loss  or  claim  that  the  Company  may 
incur  by  reason  of  such  issuance  of  stock;  but  the  Board 
of  Directors  may  in  its  discretion  refuse  to  issue  such 
new  certificates,  save  upon  the  order  of  some  court  hav- 
ing jurisdiction  in  such  matter."  Art.  I,  §  3,  By-laws. 


40  CORPORATE    MANAGEMENT. 

If  a  certificate  of  stock  is  lost  or  stolen,  another  may  be 
issued  in  its  place ;  but  the  officers  of  the  company  should  not 
take  this  responsibility  without  express  authorization  from  the 
board  of  directors.  Should  they  do  so  and  the  missing  certifi- 
cate turn  up  in  such  a  way  that  a  loss  was  involved,  they  would 
be  held  responsible.  It  should  be  noted  that,  if  for  no  other 
reason  than  the  trouble  involved  in  case  of  loss,  stock  certifi- 
cates should  always  be  carefully  preserved.  In  case  certificates 
are  lost  or  stolen,  the  secretary  of  the  company  should  be  imme- 
diately notified  and  such  other  steps  taken  as  may  be  necessary 
to  prevent  the  negotiation  of  the  missing  certificates.  This  is 
particularly  important  where  such  certificates  have  been 
endorsed  and  held  in  blank.  (See  Form  17.) 

Should  a  lost  certificate  be  presented  to  the  secretary  for 
transfer  before  that  official  is  notified  of  its  loss,  he  might  make 
the  transfer  without  liability  if  the  circumstances  were  such  as 
to  justify  him  in  the  belief  that  such  transfer  was  regular  and 
in  good  faith.  After  having  been  warned  of  the  loss  he  could 
not  make  such  transfer  without  personal  liability.  In  case  of 
any  doubt,  or  any  dispute  as  to  ownership  of  a  certificate,  no 
transfer  should  be  made  until  the  true  ownership  has  been 
definitely  determined. 

The  officials  of  a  corporation  have  no  legal  right  to  refuse 
recognition  to  any  stockholder  of  record,  or  withhold  divi- 
dends, or  any  other  corporate  right,  on  account  of  the  loss  of  his 
certificate.  If  the  books  of  the  company  show  him  to  be  a 
stockholder  he  is  entitled  to  every  right  and  privilege  of  a 
stockholder  without  regard  to  the  whereabouts  of  his  certifi- 
cate. The  certificate  is  merely  a  convenient,  negotiable  evi- 
dence of  stock  ownership,  but  for  all  corporate  purposes,  the 
books  of  the  company  are  the  final  and  decisive  authority  which 
must  be  recognized  by  the  corporate  officials. 

When  certificates  are  lost,  the  owner  usually  desires  to  have 
new  certificates  issued  so  that  he  may  be  in  a  position  to  sell 
or  pledge,  or  otherwise  use  his  stock.  The  by-law  as  given 
outlines  the  proper  procedure.  A  sufficient  bond  of  indemnity 


STOCK.  41 

is  required,  as  it  is  always  possible  that  the  certificate  may  turn 
up  in  the  hands  of  an  innocent  purchaser  for  value,  who  would 
have  a  case  for  damages  against  the  corporation  if  they  refused 
to  recognize  his  rights.  When  the  value  of  the  missing  certifi- 
cate is  considerable,  it  is  best  for  the  directors  to  refuse  to 
issue  a  new  certificate  until  the  loser  secures  an  order  from 
some  court  of  competent  jurisdiction.  This  course  relieves  the 
directors  from  all  responsibility  in  the  matter.  (See  Form 
I54-) 

§  46.  Stock  and  Transfer  Books. 

"  The  books  and  records  of  the  Company  shall  be 
kept  at  its  office,  No.  52  Broadway,  in  the  City  and  State 
of  New  York,  and  the  Stock  Book  shall  be  open  during 
business  hours  for  the  inspection  of  any  stockholder  or 
judgment  creditor  of  the  Company."  Art.  I,  §  4,  By- 
laws. 

This  section  is  for  the  most  part  declarative  of  the  statute 
law  of  New  York.  Failure  to  observe  these  requirements  sub- 
jects both  the  corporation  and  the  offending  officer  to  heavy 
penalties.  Corporations  chartered  under  the  laws  of  other 
states,  but  doing  business  in  New  York,  are  likewise  compelled 
to  keep  a  stock  book  open  for  inspection  in  their  New  York 
offices.  In  the  case  of  such  companies,  the  by-laws  would 
require  some  slight  modification.  A  New  Jersey  Corporation 
would  require  a  by-law  drawn  as  in  Art.  I,  Sec.  4  of  the  By- 
laws given  in  Form  22. 

(See  §§  146,  148,  149  and  150;  also  Forms  149,  150 
and  151.) 

§  47.  Preferred  Stock. 

"  The  capital  stock  of  this  Company  shall  be  One 
Hundred  Thousand  Dollars  consisting  of  One  Thousand 
Shares,  each  of  the  par  value  of  One  Hundred  Dollars. 
Of  these,  Five  Hundred  Shares  shall  be  preferred  stock 
and  Five  Hundred  Shares  shall  be  common  stock. 

"  Said  preferred  stock  shall  receive  from  the  net 
earnings  of  the  Company  a  six  per  cent.,  annual,  cumu- 
lative dividend  before  any  dividends  are  paid  upon  the 


42  CORPORATE    MANAGEMENT. 

common  stock,  but  such  stock  shall  not  entitle  the  holders 
thereof  to  vote  at  the  meetings  of  the  stockholders  of 
the  Company."  Art.  I,  §  5,  By-laws. 

The  foregoing  describes  one  of  the  simplest  forms  of  pre- 
ferred stock.  There  are  many  variations.  It  is  possible  for 
a  company  to  have  two  or  more  classes  of  preferred  stock,  each 
drawing  a  different  percentage,  the  dividend  of  one  class  to  be 
paid  before  that  of  the  other  class  or  classes.  Also,  preferred 
stock  is  sometimes  arranged  to  first  draw  its  preferential  divi- 
dend each  year,  then  to  participate  with  the  common  stock  in 
any  further  dividends  declared  that  year,  or  the  common  stock 
may  draw  a  dividend  equal  to  that  of  the  preferred  stock  and 
then  both  stocks  participate  equally  in  any  further  dividends 
that  may  be  declared  that  year. 

In  New  York  and  New  Jersey,  preferred  stock  must  be 
provided  for  in  the  charter,  or  thereafter  by  the  vote  of  two- 
thirds  of  the  stockholders  of  record,  which  vote  must  be  evi- 
denced to  the  office  of  the  Secretary  of  State  by  a  duly  exe- 
cuted certificate.  The  provisions  as  to  preferred  stock  are 
included  in  the  by-laws  merely  as  a  matter  of  convenient  refer- 
ence and  to  make  their  record  complete.  The  issuance  of  pre- 
ferred stock  is  not  authorized  thereby. 

Preferred  stock  can  only  claim  dividends  from  net  profits. 
If  there  are  no  profits,  its  holders  have  no  claim  against  the 
corporation.  If  it  is  cumulative  preferred  stock,  all  arrearages 
for  past  years  must  be  paid  in  full  before  any  profits  can  be 
applied  to  the  payment  of  dividends  upon  common  stock.  It  is 
then  sometimes  called  "  guaranteed  stock."  Sometimes  it  is 
provided  that  preferred  stock  may  be  redeemed  at  a  fixed  price 
after  a  certain  term  of  years.  Sometimes  it  is  provided  that 
the  preferred  stock  is  to  have  preference  in  the  distribution  of 
the  assets  upon  the  dissolution  of  the  corporation.  This  is  a 
statutory  provision  in  New  Jersey. 

Where  money  can  be  raised  by  the  sale  of  preferred  stock, 
it  is  preferable  to  a  bond  issue,  as  the  failure  to  pay  dividends 
gives  its  holders  no  cause  of  action  against  the  company.  In 


STOCK.  43 

other  words,  preferred  stock  is  not  a  debt  of  the  company  and 
a  bond  issue  is.  Unless  expressly  prohibited  from  voting,  pre- 
ferred stock  would  have  the  same  right  to  vote  as  common 
stock. 

There  is  no  limit  to  the  forms  in  which  preferred  stock 
may  be  issued.  In  all  cases,  the  nature  of  the  stock  and  its 
preferences,  privileges  and  limitations  should  be  plainly  printed 
upon  the  face  of  the  certificates.  This  prevents  any  misrepre- 
sentation or  misunderstanding  regarding  its  character.  (See 
Forms  15,  16.) 

§  48.  Treasury  Stock. 

"  All  issued  and  outstanding  stock  of  the  Company 
that  may  be  donated  to,  or  purchased  by,  the  Company 
shall  be  treasury  stock  and  shall  be  held  subject  to  dis- 
posal by  action  of  the  Board  of  Directors.  Such  stock 
shall  neither  vote  nor  participate  in  dividends  while  held 
by  the  Company."  Art.  I,  §  6,  By-laws. 

Unissued  stock  is  sometimes  wrongly  called  treasury  stock. 
The  by-law  as  given  defines  treasury  stock  correctly.  It  is  stock 
that  has  been  issued  and  has  come  back  into  possession  of  the 
company.  It  is  an  asset  of  the  company  and  may  be  sold  by 
the  board,  as  any  other  property  would  be  sold.  If  it  has 
been  "  full-paid,"  it  retains  that  character,  and  may  be  sold 
below  par,  without  involving  the  purchaser  in  any  possible  lia- 
bility on  that  account.  In  this  respect  it  differs  from  stock 
issued  in  the  first  place  for  less  than  its  par  value,  which  may 
later  involve  its  purchaser  in  further  liabilities  should  the  cor- 
poration become  insolvent. 

It  is  usual  when  a  company  is  formed  to  develop  some  new 
enterprise,  to  issue  all  or  a  part  of  its  stock  for  property, 
thereby  making  it  full-paid;  and  then  from  this  full-paid  stock 
to  have  a  certain  amount  donated  to  the  company  for  the 
express  purpose  of  selling  it  below  par  in  order  to  raise  a 
working  capital. 


44  CORPORATE    MANAGEMENT. 

When  stock  is  donated  to  the  company,  the  certificates 
turned  in  should  be  assigned  to  "  Treasurer  of  Company." 
The  certificates  so  assigned  are  canceled,  and  when  treasury 
stock  is  to  be  sold,  new  certificates  are  issued  to  the  purchasers. 
Certificates  might  be  issued  to  the  treasurer  for  this  treasury 
stock,  pending  its  sale,  or  other  disposition,  but  to  do  so  would 
be  entirely  unnecessary  and  would  place  it  within  the  power 
of  the  treasurer  to  transfer  such  stock  without  the  knowledge 
or  consent  of  any  other  officer  of  the  company.  It  is  better 
that  treasury  stock  should  be  represented  by  a  credit  in  the 
stock  ledger  rather  than  by  outstanding  certificates. 

While  the  company  holds  treasury  stock,  such  stock  is  inert 
and  can  neither  be  voted  nor  participate  in  dividends.     It  is, 
however,  "  issued  and  outstanding  stock/'  but  as  such  is  not 
subject  to  taxation  under  the  New  Jersey  statutes. 
§  49.  General. 

The  stock  of  other  corporations  may  be  held  by  a  New 
York  corporation  if  a  provision  granting  such  power  has  been 
inserted  in  its  certificate  of  incorporation.  In  New  Jersey, 
corporations  may  hold  the  stock  and  bonds  of  other  corpora- 
tions without  any  such  special  provision.  In  other  states,  the 
statutes  and  decisions  should  be  consulted,  as  at  common  law 
a  corporation  cannot  hold  stock  in  another  corporation. 

It  should  be  emphasized  that  corporations  are  the  creatures 
of  the  law  and  the  provisions  governing  them  differ  in  every 
state,  hence  every  corporation  should  provide  its  officers  with 
a  copy  of  the  corporation  laws  of  the  state  of  incorporation, 
and  if  such  corporation  is  doing  business  and  has  an  office  in 
any  other  state,  its  laws  should  likewise  be  studied. 

In  the  state  where  it  is  incorporated,  a  corporation  is 
classed  as  a  "  domestic  corporation."  If  it  does  business  in 
another  state,  it  will  be  classed  as  a  "  foreign  corporation." 
In  many  states  there  are  special  laws  for  the  regulation  of 
"  foreign  corporations,"  and  these  laws  should  be  known  by 
the  officials  of  any  such  corporations. 


CHAPTER  V. 
STOCKHOLDERS. 


(BY-LAWS.) 
§  50.  Annual  Meetings. 

"  The  regular  annual  meetings  of  the  stockholders 
shall  be  held  in  the  office  of  the  Company,  in  the  City 
and  State  of  New  York,  at  10  o'clock  A.  M.  on  the  second 
Monday  of  January  in  each  year  if  not  a  legal  holiday, 
but,  if  a  legal  holiday,  then  on  the  day  following.  At  this 
meeting  the  directors  for  the  ensuing  year  shall  be 
elected,  the  officers  of  the  Company  shall  present  their 
annual  reports,  and  the  Secretary  shall  have  on  file  for 
inspection  and  reference  an  alphabetical  list  of  the  stock- 
holders, giving  the  amount  of  stock  held  by  each  as 
shown  by  the  stock  books  of  the  Company  twenty  days 
before  the  date  of  such  annual  meeting."  Art.  II,  §  I, 
By-laws. 

Annual  meetings  and  corporate  elections,  to  be  legal,  must 
usually  be  held  within  the  state  of  incorporation.  The  prin- 
cipal office  of  the  company  in  the  state  is  the  customary  and 
most  appropriate  place  of  meeting.  At  this  annual  meeting 
any  business  may  be  transacted  without  previous  notice,  but 
where  matters  of  importance  are  to  be  considered  it  is  well  that 
the  stockholders  be  notified  in  advance.  If  the  by-laws  are  to 
be  amended,  it  should  be  done  at  this  meeting.  If  any 
sweeping  change  of  business  or  policy  is  to  be  made,  it  should 
be  authorized  by  resolution  of  the  stockholders  at  the  annual 
meeting  unless  a  special  meeting  be  called  for  the  purpose  at 
some  other  time.  Generally  the  principal  business  of  the 
annual  meeting  is  the  election  of  directors.  The  list  of  stock- 
holders provided  for  in  the  foregoing  by-law  is  not  required  by 

45 


46  CORPORATE    MANAGEMENT. 

the  New  York  statutes,  but  is  included  because  it  is  the  most 
convenient  form  in  which  to  bring  this  necessary  information 
before  the  meeting.  (See  Chapter  X;  also  Form  98.) 


§  51.  Special  Meetings. 

"  Special  Meetings  of  the  stockholders  may  be  held 
at  any  time  in  the  office  of  the  Company,  pursuant  to  a 
resolution  of  the  Board  of  Directors,  or  by  a  call  signed 
by  stockholders  holding  a  majority  of  the  voting  stock 
of  the  Company.  Calls  for  special  meetings  shall  specify 
the  time,  place  and  object  or  objects  thereof,  and  no 
other  business  than  that  specified  in  the  call  shall  be  con- 
sidered at  any  such  meeting."  Art.  II,  §  2,  By-laws. 

It  is  essential  that  the  rules  relating  to  special  meetings 
be  carefully  observed.  The  call  should  recite  the  three  essen- 
tials of  time,  place  and  objects.  These  every  stockholder  has 
a  right  to  know ;  and  the  omission  of  any  one  might  invalidate 
the  entire  action  of  the  meeting.  No  business  except  that 
which  has  been  specified  in  the  call  and  notice  can  be  legally 
transacted  at  a  special  meeting.  To  end  a  call  and  notice,  as 
is  frequently  done,  with  some  general  phrase,  such  as  "  and  all 
other  matters  that  may  come  before  such  meeting,"  does  not 
add  to  the  scope  or  force  of  the  notice  in  any  way,  and  does  not 
in  itself  legally  authorize  anything. 

Where  a  company  has  but  few  stockholders,  much  time  and 
trouble  may  be  saved  by  uniting  the  call  for  a  special  meeting 
with  a  waiver  of  the  formalities  of  notice.  Such  an  instru- 
ment signed  by  all  of  the  stockholders  enables  the  corporation 
to  hold  a  meeting  without  the  delay  otherwise  unavoidable. 
(See  §  52.)  No  stockholders  signing  such  waiver  of  the  for- 
malities can  afterward  complain  of  want  of  notice.  Especially 
is  this  method  used  in  the  meetings  for  organization  purposes, 
when  the  stockholders  are  limited  in  number  and  are  usually 
accessible.  (See  Chap.  XI;  also  Forms  74,  75,  77,  80,  81,  82, 
95,  96.) 


STOCKHOLDERS.  47 

§  52.  Notice  of  Meetings. 

"  A  written  or  printed  notice  of  every  regular  or 
special  meeting  of  the  stockholders,  stating  the  time  and 
place,  and  in  case  of  special  meetings,  the  objects  thereof, 
shall  be  prepared  and  mailed  by  the  Secretary,  postage 
prepaid,  to  the  last  known  Post  Office  address  of  each 
stockholder,  at  least  ten  days  before  the  date  of  any  such 
meeting. 

"  If  an  election  of  directors  is  to  be  held  at  any  such 
meeting,  the  Secretary  shall,  in  addition  to  the  prescribed 
notice  by  mail,  give  notice  of  such  meeting  and  election 
by  publication  thereof  at  least  once  a  week  for  two 
successive  weeks  immediately  preceding  such  election,  in 
a  newspaper  published  in  the  county  where  such  election 
is  to  be  held."  Art.  II,  §  3,  By-laws. 

Every  stockholder  has  a  right  to  know  when  and  where 
meetings  in  which  he  is  interested  are  to  be  held,  and  to  have 
sufficient  notice  of  such  meetings  to  enable  him  to  conveniently 
attend.  The  clause  in  the  above  by-law,  relative  to  notice  by 
publication,  is  in  accordance  with  the  New  York  statutes.  This 
is,  however,  a  most  uncertain  method  of  notification,  and  by- 
laws should  always  provide  that  each  stockholder  shall  be  noti- 
fied by  mail.  This  latter  is  the  most  effective  method  of  noti- 
fication that  has  yet  been  devised.  (See  §§  102,  105,  113, 
116;  also  Forms  85,  86,  87,  88.) 

§  53-  Voting. 

"  Only  stockholders  of  record  shall  be  entitled  to  vote 
at  the  regular  and  special  meetings  of  stockholders.  At 
such  meetings  each  stockholder  shall  be  entitled  to  one 
vote  for  each  share  of  stock  held  in  his  name."  Art.  II, 
§  4,  By-laws. 

This  by-law  conforms  to  the  general  law  on  the  subject.  If 
a  non-voting  preferred  stock  were  to  be  issued,  it  would  be 
necessary  to  alter  the  above  by-law  so  as  to  limit  the  voting 
right  to  holders  of  common  stock.  (See  §  54,  "Elections" 
and  "  Cumulative  Voting.") 


48  CORPORATE    MANAGEMENT. 

In  New  York,  where  stock  has  been  pledged  and  has  been 
transferred  on  the  books  of  the  company  to  the  pledgee,  the 
owner  has  the  right  to  demand  and  receive  a  proxy  from  the 
pledgee,  upon  paying  the  necessary  expenses.  If  he  neglects 
to  do  this  the  pledgee  will  have  the  right  to  vote  on  such  stock. 
In  New  Jersey,  if  it  appears  on  the  transfer  that  stock  has  only 
been  transferred  as  a  pledge,  the  owner  retains  the  right  to  vote 
thereupon.  The  general  rule  is  that  a  pledgee,  to  whose  name 
stock  has  been  transferred  on  the  books  of  the  company,  has 
the  right  to  vote  such  stock. 

§  54.  Election  of  Director*. 

"  At  each  annual  meeting  of  the  stockholders  of  the 
Company,  nine  directors  shall  be  elected,  who  shall  serve 
until  the  election  and  acceptance  of  their  duly  qualified 
successors.  All  elections  for  directors  shall  be  by  ballot, 
and  the  candidates,  to  the  number  to  be  elected,  receiving 
the  highest  number  of  votes,  shall  be  declared  elected. 

"If  for  any  reason  directors  are  not  elected  at  the 
regular  annual  meeting  of  stockholders,  a  special  meet- 
ing shall  be  called  for  the  purpose  within  thirty  days 
thereafter,  at  which  directors  shall  be  elected  in  all  re- 
spects as  at  the  annual  meeting. 

"  Two  inspectors  of  election  shall  be  appointed  by 
the  President  to  conduct  the  election  of  directors  to 
serve  for  the  ensuing  year.  These  inspectors  shall  be 
sworn  to  the  faithful  discharge  of  their  duty,  and  shall 
then  take  charge  of  the  election  (but  the  inspectors  for 
the  first  election  shall  be  appointed  by  the  Board  of 
Directors  named  in  the  charter). 

"  In  all  elections  for  directors,  each  stockholder  of 
record  shall  be  entitled  to  cast,  for  each  share  of  stock 
held  by  him,  as  many  votes  as  there  are  directors  to  be 
elected,  and  he  may  cast  the  whole  number  of  such  votes 
for  one  candidate,  or  distribute  them  among  two  or  more 
candidates,  as  he  may  prefer."  Art.  II,  §  5,  By-laws. 

Under  the  above  by-law,  a  director,  once  elected,  holds  his 
office  until  the  election  and  acceptance  of  his  duly  qualified 


STOCKHOLDERS.  49 

successor.  Were  it  otherwise,  at  the  end  of  the  year  the  corpo- 
ration would,  in  the  event  of  any  failure  in  the  regular  election, 
be  left  without  a  managing  board.  A  director-elect's  acceptance 
of  the  position  to  which  he  has  been  elected  is  usually  indicated 
by  a  verbal  assent  or  by  attendance  at  the  next  board  meeting, 
though  greater  formality  is  sometimes  required. 

Usually  the  only  necessary  qualification  for  the  office  of 
director  is  the  holding  of  stock  in  the  company.  In  New  York, 
it  may  be  provided  in  the  charter  or  by-laws  that  directors  need 
not  be  stockholders.  In  New  Jersey,  the  requirement  is  abso- 
lute, and  directors  must  hold  stock  when  they  are  elected.  In 
most  states  it  is  sufficient  that  directors  secure  stock  before  they 
assume  to  act. 

The  annual  election  of  directors  is  in  the  larger  corpora- 
tions the  most  important  event  in  the  corporate  calendar, 
deciding  the  management,  and,  generally,  the  policy  of  the 
company  for  the  ensuing  year.  In  the  smaller  corporations  the 
matter  is  not  usually  of  so  much  importance,  and  frequently  a 
small  or  "  close  "  corporation  will  omit  the  election  of  directors 
entirely.  The  only  effect  of  this  omission  is,  under  the  by-law 
provision  mentioned,  which  is  also  the  common  law,  to  continue 
the  old  board  for  another  year.  There  is  no  legal  objection  to 
this  practice  if  all  the  stockholders  acquiesce. 

Inspectors  of  election  are  required  in  New  York  and  New 
Jersey.  The  clause  in  brackets  in  the  by-law  given  is  intended 
to  meet  the  New  York  requirement  that  the  directors  shall 
appoint  the  first  inspectors,  and  could  be  omitted  in  other  states. 
(See  §§  102,  108;  also  Chap.  XXIX,  and  Forms  92,  93.) 

Cumulative  Voting. — Under  the  laws  of  New  York  and 
New  Jersey  cumulative  voting,  if  desired,  must  be  provided 
for  in  the  charter  of  the  company.  The  provision  should  then 
be  repeated  as  above  in  the  by-laws.  The  right  only  applies 
to  voting  for  the  election  of  directors.  It  allows  each  stock- 
holder to  cast  as  many  votes  as  shall  equal  the  number  of  his 
shares  of  stock,  multiplied  by  the  number  of  directors  to  be 
elected,  and  to  cast  all  of  such  votes  for  a  single  director  or  to 
4 


60  CORPORATE    MANAGEMENT. 

distribute  them  among  the  number  to  be  voted  for,  or  any  two 
or  more  of  them.  The  result  is  to  insure  the  minority  some 
representation  upon  the  board.  Under  the  usual  plan  of  voting, 
the  majority  would  elect  all  the  board;  and  the  minority  unless 
by  favor  of  the  majority  would  be  debarred  absolutely  from 
any  part  in  the  deliberations  of  the  board  and  the  management 
of  the  company.  With  cumulative  voting,  while  it  would  under 
no  circumstances  be  possible  for  the  minority  stockholders  to 
control,  they  may  always  be  represented  upon  the  board,  and 
thus  be  able  to  keep  in  touch  with  the  proceedings  of  the  board 
and  the  management  of  the  company.  This  is  often  of  very 
great  advantage,  as,  in  the  event  of  any  threatened  abuse  of 
power  by  the  majority,  the  minority,  knowing  of  it  in  advance, 
would  have  opportunity  to  save  their  rights  by  legal  action. 
In  Pennsylvania  and  some  other  states  this  privilege  of  cumu- 
lative voting  is  guaranteed  by  the  State  Constitution. 

If  the  directors  are  to  be  classified,  the  preceding  section 
of  the  by-laws  should  be  modified  to  agree  with  the  by-law 
suggested  in  Section  66  in  the  next  chapter.  As  directors  are 
not  named  in  the  charters  of  New  Jersey  corporations,  it  would 
be  necessary,  for  that  state,  to  word  this  section  of  the  by-laws 
as  in  Form  22,  Art.  II,  Sec.  5.  (See  §  108;  also  Forms  92,  93.) 

§  55-  Quorum. 

"  A  majority  of  the  outstanding  stock,  exclusive  of 
treasury  stock,  shall  be  necessary  to  constitute  a  quorum 
at  meetings  of  stockholders.  When  a  quorum  is  present 
at  any  meeting,  a  majority  of  the  stock  represented 
thereat  shall  decide  any  question  brought  before  such 
meeting.  In  the  absence  of  a  quorum,  those  present 
may  adjourn  the  meeting  from  day  to  day,  but  until  a 
quorum  is  secured  may  transact  no  business."  Art.  II, 
§  6,  By-laws. 

The  by-laws  may  fix  the  quorum  at  less  than  a  majority  of 
the  outstanding  stock,  and  any  quorum  so  fixed  may  legally 
transact  business.  Such  a  provision,  however,  is  not  entirely 
safe ;  and  the  best  practice  requires  a  majority  of  all  the  stock  to 


STOCKHOLDERS.  51 

constitute  a  quorum.  Even  then  a  majority  of  the  quorum  de- 
cides any  question  acted  upon,  so  that  if  only  a  bare  majority  of 
the  stock  were  present  at  any  meeting  it  would  be  quite  possible 
for  matters  of  the  greatest  importance  to  be  determined  by 
little  more  than  one-forth  of  the  outstanding  stock.  This 
is  certainly  as  far  as  it  is  safe  to  go.  If  a  quorum  is  not  present 
at  any  meeting,  the  stockholders  present  may,  if  desirable, 
adjourn  from  day  to  day,  until  a  quorum  is  secured  and  the 
meeting  held.  This  sometimes  saves  calling  another  meeting. 
Such  an  adjourned  meeting  is,  from  a  legal  standpoint,  merely 
a  continuation  of  the  original  meeting;  and  any  business  that 
might  have  been  transacted  at  that  meeting  may  be  acted  upon 
at  the  adjourned  meeting.  (See  last  part  of  §  104.) 

It  is  to  be  noted  that  by  a  peculiar  provision  of  the  New 
York  statutes  an  election  of  directors  may  be  held  without  a 
quorum.  No  matter  how  small  the  number  of  stockholders 
meeting  at  the  duly  appointed  time  and  place,  they  have  power 
to  elect  directors. 

§  56.  Proxies. 

"  Any  stockholder  entitled  to  vote  may  be  repre- 
sented at  any  regular  or  special  meeting  of  stockholders 
by  a  duly  executed  proxy.  Proxies  shall  be  in  writing 
and  properly  signed,  but  shall  require  no  other  attesta- 
tion. No  proxy  shall  be  recognized  unless  executed 
within  eleven  months  of  the  date  of  the  meeting  at  which 
it  is  presented."  Art.  II,  §  7,  By-laws. 

Proxies  play  a  very  important  part  in  modern  corporate 
procedure.  Important  meetings  are  held,  and  actions  taken 
on  matters  of  the  greatest  moment  by  a  few  individuals  (often 
not  even  stockholders)  holding  the  proxies  of  the  stockholders. 
It  is  common  when  sending  out  notices  of  stockholders'  meet- 
ings to  include  blank  proxy  forms,  with  the  request  that  any 
stockholder  unable  to  be  present  fill  out  the  proxy  and  return 
the  same,  in  order  that  his  stock  may  be  represented  at  the 
meeting. 


52  CORPORATE    MANAGEMENT. 

A  proxy  is  in  itself  simply  a  power  of  attorney  authorizing 
some  specified  person  to  act  at  corporate  meetings  for  the  stock- 
holder by  whom  the  proxy  is  signed.  In  New  York,  no  proxy 
is  valid  after  eleven  months,  unless  the  person  making  it  has 
specified  a  longer  time.  In  New  Jersey,  three  years  is  the  legal 
limit.  In  any  case  a  proxy  can  always  be  revoked  at  any  time 
by  the  maker.  The  proviso  in  the  by-laws  that  no  proxy  is  to 
be  recognized  unless  executed  within  eleven  months,  or  other 
limited  period,  necessitates  the  execution  of  a  fresh  proxy  for 
every  annual  meeting.  Under  this  provision  the  proxies  really 
represent  the  stockholders,  and  are  not  simply  out-of-date 
authorizations  that  the  maker  has  forgotten  to  revoke.  Proxies 
should  be  filed  with  the  secretary  at  or  before  roll  call  and  should 
be  preserved  by  him.  (See  §  104;  also  Forms  23  to  30.) 

§  57.  Officers  of  Meetings. 

"  The  President,  if  present,  shall  preside  at  all  meet- 
ings of  the  stockholders.  In  his  absence,  the  next  officer 
in  due  order  who  may  be  present,  shall  preside.  For 
the  purposes  of  these  by-laws,  the  due  order  of  officers 
shall  be  as  follows : 

"  President,  Vice-President  and  Treasurer. 
"  The  Secretary  of  the  Company  shall  keep  a  faith- 
ful record  of  the  proceedings  of  all  stockholders'  meet- 
ings."   Art.  II,  §  8,  By-laws. 

This  section  merely  provides  against  possible  contingencies 
that  may  occur,  and  cause  waste  of  time  and  uncertainty  of 
action  for  lack  of  a  clear  provision  on  the  subject.  If  the  secre- 
tary were  the  only  officer  present,  he  might  very  properly 
request  some  one  else  to  take  the  chair,  rather  than  to  take  it 
himself  and  appoint  some  one  else  to  perform  his  duties.  He 
could  not  act  as  president  and  secretary  at  the  same  time.  (  See 
§§  103,  1 14.)  In  the  absence  of  all  the  officers  from  any  meet- 
ing, the  stockholders  present  would  appoint  temporary  officers 
for  that  meeting. 

It  should  be  noted  that  the  regular  officers  of  the  company 
do  not  take  charge  of  the  stockholders'  meetings  ex-officio 


STOCKHOLDERS.  53 

or  as  a  matter  of  course,  but  do  so  only  when  expressly 
directed  thereto  by  the  charter  or  by-laws.  If  no  such  provi- 
sion exists,  the  stockholders  would,  at  each  meeting,  elect  or 
appoint  the  officers  of  such  meeting,  who  might  or  might  not 
be  the  regular  officers  of  the  company,  at  the  discretion  of  the 
stockholders. 

It  is  customary,  however,  where  officers  of  the  meeting  are 
elected  or  appointed,  to  appoint  the  secretary  of  the  company, 
secretary  of  the  meeting  as  well,  as  to  appoint  one  unfamiliar 
with  the  records  and  general  condition  of  the  company  might 
cause  confusion  and  delay. 

§  58.  Order  of  Business. 

"  The  order  of  business  at  the  annual  meeting,  and, 
so  far  as  practicable,  at  all  other  meetings  of  the  stock- 
holders, shall  be  as  follows : 

1.  Calling  of  Roll. 

2.  Proof  of  due  Notice  of  Meeting. 

3.  Reading  and  disposal  of  any  unapproved  Min- 
utes. 

4.  Annual  Reports  of  Officers  and  Committees. 

5.  Election  of  Directors. 

6.  Unfinished  Business. 

7.  New  Business. 

8.  Adjournment."    Art.  II,  §  9,  By-laws. 

The  order  of  business  is  included  in  the  by-laws  to  insure 
the  systematic  and  orderly  conduct  of  meetings,  and  of  the 
business  of  such  meetings.  Its  provisions  are  not,  however, 
mandatory  as  are  most  of  the  by-law  regulations,  and,  if 
desirable,  any  detail  may  be  omitted  or  taken  up  out  of  its  order 
by  due  motion,  or  by  consent  of  the  stockholders  present. 

The  secretary  may  prepare  outline  minutes  for  stock- 
holders' meetings  in  accordance  with  the  order  of  business 
given.  ( See  Form  66. )  A  copy  of  the  order  of  business  should 
be  furnished  the  president  or  chairman  of  the  meeting  in 
advance  by  the  secretary.  (For  discussion  and  application  of 
the  provisions  of  the  order  of  business,  see  Chapters  X  and  XI, 
and  more  particularly  §§  102,  103,  114,  in  those  chapters.) 


54  CORPORATE    MANAGEMENT. 

§  59.  Rights  of  Stockholders. 

The  individual  rights  of  holders  of  common  stock  are : 

1.  To  be  notified  of  and  to  participate  in  all  stock- 
holders' meetings,  in  person  or  by  proxy,  and  for  each 
share  of  stock  held  to  cast  one  vote  at  any  election  of 
directors,  or  upon  any  question  that  may  come  before 
such  meetings. 

2.  To  share,  in  proportion  to  the  amount  of  stock 
owned,  in  all  dividends  declared  on  the  common  stock. 

3.  In  event  of  the  dissolution  of  the  corporation,  to 
share  in  like  proportion  in  any  assets  remaining,  after 
all  the  corporate  debts  and  obligations  have  been  paid. 

4.  To  inspect  the  corporate  books  and  accounts. 

It  should  be  said,  however,  that  this  last  right  has  been  so 
much  impaired  by  recent  legislation  and  decisions  as  to  render 
it  little  more  than  nominal,  except  as  to  the  book  or  books 
containing  data  relating  to  the  stockholders  of  the  company. 

Holders  of  preferred  stock  have  the  same  rights  as  the 
holders  of  common  stock,  except  so  far  as  such  rights  have 
been  extended,  or  restricted,  by  the  conditions  under  which  the 
stock  was  issued. 


§  60.  Powers  of  Stockholders. 

The  individual  stockholder,  no  matter  how  large  his  hold- 
ings, has,  outside  of  stockholders'  meetings,  no  power  to  inter- 
fere in  the  lawful  management  of  the  company  or  its  business. 
If  any  illegal  or  wrongful  action  is  taken,  or  about  to  be  taken, 
he  can  appeal  to  the  courts;  or  if  he  can  induce  a  majority  of 
his  fellow  stockholders  to  act  with  him,  a  stockholders'  meeting 
may  be  called,  and  the  by-laws  amended,  or  such  other  action 
taken  as  may  be  necessary  to  prevent  any  threatened  injurious 
action.  In  some  cases  wrongs  already  done  may  be  remedied 
in  this  wav. 


STOCKHOLDERS.  55 

The  collective  powers  of  the  stockholders  apply  to  but  few 
matters  and  may  be  summarized  as  follows : 

1.  Adoption  or  amendment  of  by-laws. 

2.  Election  of  directors. 

3.  Amendment  of  the  charter. 

4.  Dissolution  of  the  company. 

5.  Sale  of  the  entire  assets. 

6.  The  exercise  of  any  specially  conferred  charter 
powers. 

In  matters  like  the  amendment  of  the  charter  or  the  disso- 
lution of  the  company,  the  power  of  stockholders  is  usually 
limited  or  regulated  by  statute;  and  in  most  cases  two-thirds 
of  all  the  stockholders  must  agree  upon  such  matters,  before 
they  may  be  done. 

§  61.  Liabilities  of  Stockholders. 

Any  stockholder  is  liable  to  the  company,  or  to  its  creditors, 
for  any  instalments  remaining  unpaid  upon  stock  subscribed  for 
by  him.  He  may  also  be  liable  to  the  creditors  on  any  stock 
held  by  him  that  is  not  full-paid.  In  such  case  the  amount  of 
his  liability  would  be  the  difference  between  the  price  received 
by  the  company  for  such  stock  and  its  par  value.  Where  prop- 
erty has  been  taken  for  stock,  if  there  has  been  any  unfair 
dealing,  or  such  over-valuation  of  the  property  as  to  be  fraud- 
ulent, the  stock  would  be  held  to  be  put  partly  paid,  and  in 
case  of  insolvency,  there  might  be  a  liability  for  any  amount 
held  to  be  yet  due. 

Should  dividends  be  declared  from  the  capital  of  the  com- 
pany, stockholders  would  be  liable  to  creditors  for  any  amount 
so  received  by  them.  There  is,  however,  no  liability  for  divi- 
dends declared  from  profits,  even  though  the  company  after- 
ward becomes  insolvent. 

In  New  York,  stockholders  are  liable  personally  for  all 
debts  due  to  any  laborers,  servants  or  employees,  for  services 
rendered  to  the  corporation. 


66  CORPORATE    MANAGEMENT. 

In  some  few  states,  by  special  statutes,  holders  of  full-paid 
stock  are  liable,  in  case  of  insolvency  of  the  company,  to  pay  an 
additional  amount  equal  to  the  face  value  of  their  stock. 

§  62.  General. 

Practically,  the  stockholder  who  owns  but  a  few  shares  in 
a  corporation  cannot  defend  his  limited  rights  without  greater 
expense  than  they  are  worth.  If  the  majority  in  interest  are 
incapable  or  unscrupulous,  there  is  neither  magic  in  the  corpo- 
rate system,  nor  force  in  corporate  laws,  to  make  safe  the 
rights  of  small  stockholders.  In  all  small  corporate  investments 
more  reliance  is  always  to  be  placed  on  the  character  of  the 
management  than  on  the  possible  enforcement  of  abstract  legal 
rights.  The  character  and  ability  of  those  in  control  is  as 
important  in  corporate  enterprise  as  in  any  other  form  of  busi- 
ness venture. 


CHAPTER   VI. 
DIRECTORS. 


(BY-LAWS.) 
§  63.  Number  and  Authority. 

"  A  Board  of  nine  directors  shall  be  elected,  which 
shall  have  entire  charge  of  the  property,  interests,  busi- 
ness and  transactions  of  the  Company,  with  full  power 
and  authority  to  manage  and  conduct  the  same."  Art. 
Ill,  §  i,  By-laws. 

The  number  of  directors  is  frequently  fixed  by  statute 
within  more  or  less  definite  limits.  In  New  York  and  New 
Jersey  there  is  no  maximum  limit,  but  the  board  must  consist 
of  at  least  three  members. 

For  the  ordinary  business  corporation,  a  small  board  of 
directors  is  most  convenient,  and,  usually,  most  effective.  A 
large  board  is  hard  to  assemble,  requires  much  time  for  delib- 
eration and  decision,  and  its  members  are  not  likely  to  feel  the 
same  personal  responsibility  for  the  proper  management  and 
the  success  of  the  company  that  obtains  in  a  smaller  managing 
body.  This  usually  ends  in  either  giving  undue  authority  to 
the  officers,  or  in  the  creation  of  an  executive  committee  of 
limited  numbers,  on  which  devolves  the  real  management  of 
the  corporation. 

The  authority  of  the  board  as  set  forth  in  the  above  by-law 
is  merely  a  statement  of  their  actual  legal  power.  Under  the 
common  or  statutory  law  they  exercise  the  active,  controlling 
power  in  all  corporate  business.  As  expressed  by  an  eminent 
corporation  authority,  "  In  all  cases,  the  board  of  directors  and 

57 


58  CORPORATE    MANAGEMENT. 

not  the  stockholders,  -nor  the  president,  secretary,  treasurer  or 
other  agent,  is  the  original  and  supreme  power  in  the  corpora- 
tion to  make  corporate  contracts.  The  stockholders  can  neither 
force  the  directors  to  act  nor  restrain  them  from  acting,  unless 
the  neglect  in  the  one  case,  or  the  act  in  the  other,  is  so  glaringly 
unjust  or  injurious  to  the  interests  of  the  stockholders  as  to 
warrant  an  appeal  to  the  courts.  Speaking  generally,  the  stock- 
holders' only  recourse  in  case  of  dissatisfaction  with  the  board 
is  to  wait  until  the  next  annual  meeting  and  elect  a  new  and 
more  amenable  board. 

Unless  restricted  by  statute,  charter  or  by-laws,  the  direct- 
ors have  full  power  on  behalf  of  the  corporation  to  borrow 
money,  contract  debt,  issue  bonds  and  mortgage  the  property 
of  the  company.  Directors  cannot,  however,  as  a  rule,  make 
by-laws,  unless  some  power  in  this  direction  has  been  given 
them  by  express  provision  of  statute,  charter  or  by-laws.  ( See 

§§34,35,73,99-) 

It  should  be  noted  that  the  directors  are  controlled  by  and 
are  amenable  to  the  charter  and  by-laws,  and  any  provisions 
incorporated  therein  as  to  the  directors'  power  of  contracting 
debt,  selling  company  property,  etc.,  if  reasonable,  prevail,  and 
the  directors,  should  they  not  observe  or  violate  such  pro- 
visions, would  be  legally  liable  for  any  resulting  damages. 

The  directors  can  only  act  collectively  and  in  a  regular  or 
duly  called  meeting.  A  single  director,  unless  he  holds  some 
other  office  in  the  company  as  well,  has  no  power  or  authority 
of  himself  in  corporate  matters.  Neither  is  the  separate  assent 
of  the  directors  to  a  measure  of  any  legal  force,  though  action 
is  very  frequently  decided  upon  in  this  way  and  then  formally 
ratified  at  the  next  meeting  of  the  board.  Officers  carrying  out 
any  such  informally  authorized  measures  do  so  at  their  own 
risk,  as,  should  the  board  for  any  reason  fail  later  to  ratify  the 
same,  the  officers  would  have  acted  without  authority  and 
would  be  legally  liable  for  any  resulting  loss  or  damage  to  the 
company. 

The  board  of  directors  is  a  deliberative  body  only.    It  does 


DIRECTORS.  59 

not  carry  out  its  own  enactments  or  measures  directly,  but 
authorizes  or  instructs  the  officers  or  agents  of  the  corporation 
to  do  what  is  to  be  done.  ( See  Forms  28,  36,  38 ;  also  Chap- 
ter XL.) 

§  64.  Qualifications. 

"  No  person  shall  be  elected,  nor  shall  be  competent 
to  act  as  director  of  this  Company,  unless  he  is  the  holder 
of  record  of  at  least  one  share  of  its  stock.  At  least  one 
of  the  directors  of  the  Company  must  be  resident  in  the 
State  of  New  York."  Art.  Ill,  §  2,  By-laws. 

The  statutes  of  both  New  York  and  New  Jersey,  and  of 
many  other  states  as  well,  provide  that  directors  of  a  corpora- 
tion must  each  own  at  least  one  share  of  its  stock,  and  that  there 
must  be  at  least  one  resident  director.  In  New  York,  if  so 
provided  in  the  charter  or  by-laws,  the  statutory  provision 
requiring  directors  to  own  stock  may  be  waived.  Where  the 
statute  is  complied  with,  persons  desired  as  directors  are  often 
qualified  by  giving  them  one  or  more  shares  of  stock.  Where 
the  donation  is  not  intended  to  be  permanent,  the  certificate  is 
made  out  in  such  person's  name,  he  is  entered  on  the  stock  books 
as  a  stockholder  of  record,  and  then  the  certificate  is  properly 
endorsed  in  blank  by  him  and  handed  back  to  the  original  owner. 
This  latter  party  does  not  have  such  certificate  transferred  on 
the  books  of  the  company  at  once,  but  holds  it  assigned  in  blank. 
So  long  as  the  certificate  is  so  held,  the  party  to  whom  it  was 
made  out  is  technically  a  stockholder  and  is  therefore  qualified 
to  act  as  a  director.  Should,  however,  the  real  owner  of  the 
certificate  surrender  it  and  have  a  new  certificate  issued  in  his 
own  name,  the  "  dummy  "  director  would  be  no  longer  qualified 
and  would  cease  to  be  either  a  stockholder  or  a  director. 

Sometimes  it  is  an  advantage  to  a  corporation  to  provide 
that  each  director  must  own  a  considerable  number  of  its  shares. 
This  renders  it  more  difficult  to  fill  the  board  with  "  dummy  " 
directors.  If,  when  statutory  or  by-law  provisions  require  a 


60  CORPORATE    MANAGEMENT. 

director  to  be  a  stockholder,  any  director  disposes  of  his  stock, 
he  thereby  vacates  his  office.    See  §  54.) 

§  65.  Vacancies. 

"  Any  vacancy  occurring  in  the  Board  of  Directors 
may  be  rilled  for  the  unexpired  term  by  a  majority  vote 
of  the  remaining  members. 

"  In  event  of  the  membership  of  the  Board  falling 
below  the  number  necessary  for  a  quorum,  a  special 
meeting  of  the  stockholders  shall  be  called  and  such 
number  of  directors  elected  thereat  as  may  be  necessary 
to  restore  the  membership  of  the  Board  to  its  full  num- 
ber." Art.  Ill,  §  3,  By-laws. 

A  board  of  directors  may  legally  continue  to  act,  although 
there  are  vacancies,  provided  enough  remain  to  make  up  a 
quorum  of  the  whole  number.  It  is  safer,  however,  to  fill 
vacancies  as  they  occur.  Otherwise  the  membership  of  the 
board  might  be  reduced  below  the  number  necessary  to  consti- 
tute a  quorum,  and  the  remaining  members  would  be  unable 
to  hold  a  legal  meeting  and  could  not  legally  fill  the  vacancies 
so  as  to  rehabilitate  the  board.  In  such  event  a  special  meeting 
of  stockholders  would  be  requisite  to  elect  the  needed  directors. 

Usually  directors  cannot  be  removed,  either  by  the  board 
of  directors,  or  by  the  stockholders,  unless  such  power  is 
provided  by  the  certificate  of  incorporation.  In  New  York, 
directors  may  be  removed  for  misconduct  by  an  action  at  law, 
instituted  by  the  Attorney  General,  but  this  is  seldom  done. 

§  66.  Classification. 

("  At  the  first  election  of  directors,  one-third  of  the 
entire  Board  shall  be  elected  to  serve  until  the  next 
annual  election,  one-third  to  serve  until  the  second 
annual  election  thereafter,  and  one-third  to  serve  until 
the  third  annual  election  thereafter.  At  each  annual 
election  successors  shall  be  elected  to  the  directors  whose 
terms  expire  at  that  time,  and  the  directors  so  elected 
shall  serve  for  the  term  of  three  years  and  until  their 
successors  are  duly  elected.") 


DIRECTORS.  61 

This  section  is  used  when  it  is  desired  to  classify  the  board 
of  directors.  It  provides  for  three  classes  of  directors.  A 
greater  number  would  seldom  be  desired.  The  object  of  such 
classification  is  to  prevent  any  sudden  change  in  the  policy  and 
management  of  the  company,  as,  under  this  plan,  it  would 
take  three  years  before  a  complete  change  could  be  made  in  the 
board.  The  arrangement  is  not  usual  in  the  smaller  corpora- 
tions. In  New  Jersey,  classification  of  directors  would  have 
to  be  provided  for  in  the  certificate  of  incorporation. 

Should  any  extensive  change  take  place  in  the  ownership 
of  a  corporation  having  classified  directors,  rendering  a  con- 
siderable change  in  the  directory  desirable,  it  might  be  provided 
for  by  the  resignation  of  enough  of  the  old  directors  to  make 
places  for  the  proper  representation  of  the  new  stockholders 
upon  the  board. 

Unless  classification  of  directors  is  desired,  this  section 
should  not  be  used.  If  the  section  is  inserted,  a  corresponding 
change  should  be  made  in  Art.  II,  Sec.  5  (§  54),  so  that 
provision  shall  be  made  for  the  annual  election  of  but  three 
directors. 

If  the  above  section  is  used  it  will  come  into  the  set  of  by- 
laws as  Section  3  of  Article  III,  and  the  numbering  of  the 
sections  which  follow  must  be  changed  to  correspond. 

§  67.  Regular  Meetings. 

"  The  regular  meetings  of  the  Board  of  Directors 
shall  be  held  in  the  office  of  the  Company,  in  the  City 
of  New  York,  at  three  o'clock  p.  M.,  on  the  first  Monday 
in  each  month  if  not  a  legal  holiday,  but,  if  a  legal  holi- 
day, then  on  the  day  following."  Art.  Ill,  §  4,  By-laws. 

The  regular  meetings  of  the  board  of  directors  should  be 
held  at  such  intervals  as  the  interests  of  the  business  demand. 
How  often,  depends  on  the  circumstances  of  the  particular 
corporation.  Too  frequent  meetings  are  not  desirable,  as  special 
meetings  may  be  called  at  any  time  should  an  emergency  arise. 
The  regular  meetings  should  be  faithfully  attended.  It  is  the 


63  CORPORATE    MANAGEMENT. 

duty  of  the  directors  to  attend  these  meetings,  and  if  they  fail 
to  do  so  it  is  liable  to  cause  like  slackness  on  the  part  of  the 
officers  and  a  general  demoralization  in  the  affairs  of  the 
company.  In  a  small  corporation,  with  but  a  few  directors,  who 
are  themselves  actively  engaged  in  the  business,  it  may  be  best 
to  have  each  year  but  one  regular  meeting,  preferably  in  Janu- 
ary. Other  business  may  be  transacted  informally,  or  by  calling 
special  meetings  when  the  occasion  arises.  (See  Chap.  XII; 
also  Form  99.) 

As  a  general  rule  directors  must  meet  in  the  state  in  which 
the  corporation  has  its  principal  office.  In  New  Jersey  it  is 
provided  by  statute  that  directors  may  meet  outside  the  state, 
when  the  charter  or  by-laws  permit. 

§  68.  Special  Meetings. 

"  Special  Meetings  of  the  Board  of  Directors  may 
be  held  at  any  time,  in  the  office  of  the  Company,  in  the 
City  of  New  York,  on  the  written  call  of  the  President 
or  of  any  three  members  of  the  Board. 

"  Special  meetings  may  be  held  at  any  time  and  at 
any  place  within  the  State  and  without  notice,  by  unan- 
imous consent  of  the  Board."  Art.  Ill,  §5,  By-laws. 

It  is  most  desirable  that  all  matters  relating  to  meetings 
of  the  board  should  be  plainly  set  forth  in  the  by-laws.  In  a 
small  corporation  much  of  the  board  business  is  likely  to  be 
transacted  at  special  meetings,  and  the  manner  in  which  such 
meetings  are  called  should  be  clearly  understood  and  closely 
followed.  The  last  paragraph  provides  the  most  convenient 
method  of  calling  special  meetings,  as,  if  all  of  the  members 
sign  the  call  (See  Form  No.  78),  no  other  notice  is  required, 
and  no  dispute  about  the  formalities  can  arise  later.  The  call 
for  the  meeting  must  specify  the  business  that  is  to  be  consid- 
ered thereat,  and,  ordinarily,  no  other  business  can  be  trans- 
acted at  such  special  meeting.  If,  however,  all  of  the  directors 
are  present  at  a  special  meeting  and  agree  thereto,  any  busi- 
ness, whether  specified  or  not,  may  be  legally  transacted.  (See 
Chap.  XIII;  also  Form  78.) 


DIRECTORS.  68 

§  69.  Notice  of  Meetings. 

"  The  Secretary  shall  notify  each  member  of  the 
Board  of  all  regular  or  special  meetings,  by  mailing  to 
each  member's  last  known  address,  postage  prepaid,  at 
least  five  days  before  any  such  meeting,  a  written  or 
printed  notice  thereof,  giving  the  time,  place,  and  in  the 
case  of  special  meetings,  the  objects  thereof;  and  no 
other  business  shall  be  considered  at  any  such  meeting 
than  shall  have  been  so  notified  to  the  members."  Art. 
Ill,  §  6,  By-laws. 

No  part  of  a  secretary's  duties  is  more  important  than  the 
giving  of  due  notice  of  all  corporate  meetings.  The  time  and 
method  of  doing  this  should  be  explicitly  set  forth  in  the 
by-laws  and  be  carried  out  to  the  letter.  In  the  case  of  special 
meetings  if  one  director  is  not  notified  of  the  meeting,  he  has 
the  right  to  set  aside  its  entire  action. 

Directors  should  be  notified  of  regular  meetings  as  well  as 
of  special  meetings.  This  requirement  is,  however,  quite  fre- 
quently omitted  from  the  by-laws  on  the  presumption  that 
members  of  the  board  know  and  will  keep  in  mind  the  dates 
of  regular  meetings.  As  a  matter  of  fact  they  do  not,  and  it 
is  better  that  they  should  be  notified  of  regular  meetings  with 
the  same  formality  as  for  special  meetings.  The  secretary 
should  have  present  at  each  meeting  a  copy  of  the  notice  sent 
out  for  that  meeting,  and  be  prepared  to  state,  or  certify,  if 
required,  that  he  has  sent  copies  to  each  member,  in  accord- 
ance with  the  by-law  provisions.  (See  §§  123,  132;  also 
Forms  89,  90.) 

§  70.  Quorum. 

"A  majority  of  the  Board  of  Directors  shall  consti- 
tute a  quorum,  and  a  majority  vote  of  the  members  in 
attendance  at  any  Board  meeting  shall,  in  the  presence 
of  a  quorum,  decide  its  action.  A  minority  of  the  Board 
present  at  any  regular  or  special  meeting  may,  in  the 
absence  of  a  quorum,  adjourn  to  a  later  date,  but  may 
not  transact  any  business  until  a  quorum  has  been 
secured."  Art.  Ill,  §  7,  By-laws. 


64  CORPORATE    MANAGEMENT 

A  majority  of  the  board,  in  this  connection,  means  a 
majority  of  the  whole  board,  not  of  any  reduced  number, 
caused  by  vacancies  or  removals.  Directors  cannot  delegate 
their  authority  nor  appear  by  proxy  at  meetings,  but  must  be 
personally  present  in  order  to  act  thereat. 

§  71.  Election  of  Officers. 

"  At  the  first  meeting  of  the  Board  of  Directors  after 
the  election  of  directors  each  year,  a  President.  Vice- 
President,  Secretary,  Treasurer,  General  Manager 
and  Counsel,  shall  be  elected  to  serve  for  the  ensuing 
year  and  until  the  election  of  their  respective  successors. 
Election  shall  be  by  ballot,  and  a  majority  of  the  votes 
cast  shall  be  necessary  to  elect.  If  not  detrimental  to 
the  business  or  operations  of  the  Company,  any  two 
offices  may  be  conferred  upon  one  person.  The  directors 
shall  fix  the  compensation  of  officers,  subject  to  the  limi- 
tations of  the  Charter  and  the  By-laws.  Any  vacancies 
that  occur  may  be  filled  bv  the  Board  for  the  unexpired 
term.  The  Board  shall  have  the  right  to  remove  any 
officer  at  pleasure."  Art.  Ill,  §  8,  By-laws. 

In  small  corporations,  two  officials  are  often  all  that  are 
needed — a  president  and  a  treasurer,  who  also  acts  as  secre- 
tary. 

The  compensation  of  officers  should  always  be  fixed  at  the 
time  of  election.  If  no  salaries  are  to  be  paid,  the  matter 
should  be  distinctly  understood;  or  if  salaries  are  to  begin  at 
some  future  date,  or  on  some  future  contingency,  such  as  the 
payment  of  dividends,  that  also  should  be  definitely  arranged. 
The  subject  should  not  be  left  unsettled,  as  is  frequently  the 
case. 

The  board  would  not  have  power  to  remove  officers  at 
pleasure  during  their  term  unless  such  right  was  expressly 
given  by  the  by-laws,  charter  or  laws  of  the  state.  In  New 
York  the  statutes  give  the  directors  this  right  to  remove  any 
officer  at  pleasure.  ( See  §  82. ) 


DIRECTORS.  65 

In  the  event  of  no  election  being  held,  the  old  officers  hold 
over  until  their  respective  successors  are  duly  elected. 

§  72.  Compensation  of  Directors. 

"  Each  director  shall  receive  the  sum  of  five  dollars 
as  compensation  for  his  attendance  at  any  regular  or 
special  meeting  of  the  Board  of  Directors,  and  shall 
receive  no  other  salary  or  compensation  for  his  services 
as  a  director  of  the  Company."  Art.  Ill,  §  9,  By-laws. 

Unless  otherwise  provided  in  the  by-laws,  directors,  as 
such,  are  entitled  to  no  compensation  for  their  services.  The 
foregoing  section  provides  a  certain  sum  to  be  paid  them  for 
attendance  upon  meetings,  expressly  denying  any  other 
remuneration.  In  all  the  large  corporations  it  is  considered 
advisable  to  provide  a  small  payment,  usually  ranging  from 
five  to  ten  dollars  for  attendance  at  meetings,  in  order  to  secure 
the  presence  of  the  directors.  In  a  small  company,  where  all 
the  directors  are  personally  interested  in  the  business,  there  is 
not  the  same  difficulty  in  securing  their  attendance,  and  the 
honorarium  is  usually  omitted. 

§  73.  Power  to  Pass  By-Laws. 

"The  Board  of  Directors  shall  have  no  power  to 
amend,  alter  or  repeal  the  by-laws,  but  may  pass  such 
additional  by-laws  in  conformity  therewith  as  may  be 
necessary  or  desirable  to  facilitate  the  business  of  the 
Company."  Art.  Ill,  §  10,  By-laws. 

This  section  is  in  accord  with  the  New  York  law.  In 
New  Jersey  the  directors  have  no  power  to  pass  or  amend 
by-laws  unless  given  by  special  provision  in  the  charter  of  the 
company.  When  this  is  the  case,  the  power  given  the  directors 
by  such  special  provision  is  usually  much  more  extensive  than 
that  of  the  above  by-law ;  allowing  them  to  repeal  and  amend 
by-laws  which  have  been  passed  by  the  stockholders.  This 
practically  removes  all  by-law  restrictions  on  the  directors  and 
gives  the  majority  a  power  which  may  at  times  be  most  dan- 


66  CORPORATE    MANAGEMENT. 

gerous  to  the  minority  interests.  If  by-laws  are  compiled  with 
due  care  at  first,  there  is  seldom  any  necessity  for  alteration  by 
the  directors,  and  in  most  cases  such  power  should  be  withheld 
from  the  board. 

In  a  majority  of  the  states,  the  directors  have  no  power 
to  change  in  any  way  the  by-laws,  unless  such  authority  is 
expressly  given  to  them  by  some  such  by-law  or  charter  provi- 
sion as  set  out  above.  (See  §§  33,  34,  35,  99.) 

§  74.  Executive  Committee. 

"  The  President,  Vice-president  and  Treasurer  shall 
together  constitute  an  Executive  Committee,  which  shall 
be  a  part  of.  the  permanent  executive  organization  of  the 
Company,  and  shall,  in  the  interim  between  meetings  of 
the  Board  of  Directors,  exercise  all  the  powers  of  that 
body  in  accordance  with  the  general  policy  of  the  Com- 
pany and  the  directions  of  the  Board. 

"  Meetings  of  the  Executive  Committee  shall  be  held 
on  call  of  the  President,  or  of  any  two  members  of  the 
Committee.  All  of  the  members  of  the  Committee  must 
be  duly  notified  of  meetings,  and  a  majority  of  the  mem- 
bers shall  constitute  a  quorum.  The  Executive  Com- 
mittee shall  keep  due  record  of  all  meetings  and  actions 
of  the  Committee,  and  such  records  shall  at  all  times  be 
open  to  the  inspection  of  any  director."  Art.  Ill,  §  n, 
By-laws. 

Where  the  board  of  directors  is  necessarily  large  and  the 
business  of  the  corporation  is  extensive,  it  is  often  advan- 
tageous to  delegate  some  of  the  powers  of  the  board  to  an 
executive  committee.  How  much  power  should  be  thus  dele- 
gated is  to  be  determined  by  the ,  conditions  and  the  nature  of 
the  company's  business.  The  by-law  as  given  is  conservative, 
and  limits  the  action  and  power  of  the  committee  within 
reasonable  bounds.  Under  its  provisions  the  executive  com- 
mittee could  not  bind  the  company  in  any  unusual,  important 
or  doubtful  matter.  In  all  such  cases  the  board  must  be  assem- 
bled to  discuss  and  finally  decide.  The  object  of  having  an 


DIRECTORS.  67 

executive  committee  is  merely  to  save  calling  the  whole  board 
together  for  matters  of  ordinary  business.  Only  directors 
would  be  eligible  to  appointment  on  the  executive  committee. 

The  arrangement  is,  however,  often  abused,  the  meetings 
of  the  board  being  neglected  and  the  executive  committee  left 
to  attend  to  all  business.  In  this  way  a  few  men  will  prac- 
tically manage  the  entire  affairs  of  an  extensive  corporation. 
The  executive  committee  is  sometimes  made  use  of  designedly 
to  eliminate  the  minority  interests  from  a  knowledge  of  and 
participation  in  the  affairs  of  the  company. 

In  a  small  corporation,  with  a  compact,  easily  assembled 
board,  the  executive  committee  would  be  an  unnecessary  com- 
plication. It  is  of  importance  only  where  the  board  is  so  large 
as  to  be  unwieldy,  or  when  for  other  reasons  it  is  not  expedient 
to  have  frequent  board  meetings.  Under  such  circumstances 
a  finance  committee  is  also  frequently  added,  with  extensive 
powers  in  financial  matters. 

§  75.  Corporation  Offices. 

"  In  addition  to  the  principal  office  of  the  Company 
in  the  State  of  New  York,  other  offices  for  the  transac- 
tion of  its  business  shall  be  maintained  at  such  other 
places,  in  or  outside  of  said  State,  as  may  be  determined 
upon  by  the  Board  of  Directors."  Art.  Ill,  §  12,  By- 
laws. 

It  is  so  common  at  the  present  time  for  a  corporation  to 
have  business  offices  outside  the  state  of  its  incorporation  that 
it  is  proper  to  provide  for  such  offices  in  the  by-laws.  In  many 
cases  it  might  be  better  for  the  by-laws  to  specify  exactly  the 
place  or  places  where  such  offices  should  be  kept.  In  New 
Jersey  the  provision  in  regard  to  offices  outside  the  home  state 
is  always  embodied  in  the  certificate  of  incorporation. 

§  76.  Order  of  Business. 

'  The  regular  order  of  business  at  meetings  of  the 
Board  of  Directors  shall  be  as  follows : 

1.  Reading  and  disposal  of  any  unapproved  Min- 
utes. 

2.  Reports  of  Officers  and  Committees. 


68  CORPORATE    MANAGEMENT. 

3.  Unfinished  Business. 

4.  New  Business. 

5.  Adjournment.    Art.  Ill,  §  13,  By-laws. 

This  is  the  usual  arrangement  of  the  order  of  business,  and 
should  be  followed  as  far  as  practical  at  both  regular  and 
special  meetings  of  the  board.  It  may  be  varied  at  any  meet- 
ing to  suit  special  conditions. 

The  secretary  should  provide  the  president  with  a  copy  of 
the  order  of  business  before  the  meeting  opens.  (See  Chaps. 
XII,  XIII.) 

§  77.  Liabilities  of  Directors  under  New  York  Law. 

Directors  are,  by  statute,  personally  liable  in  New  York  as 
follows : 

1.  For  declaring  dividends,  except  from  surplus  profits, 

or  for  dividing,  withdrawing  or  paying  out  any 
part  of  the  capital,  except  as  authorized  by  law. 

2.  For  making  a  loan  of  corporation  money  to  any  stock- 

holder, or  for  discounting  from  corporation  funds 
any  note  or  evidence  of  debt  for  any  stockholder, 
or  for  receiving  the  same  for  any  installment  due 
on  stock. 

3.  For  making  any  certificate,  report  or  public  notice 

that  is  false  in  any  material  representation. 

4.  For  making  illegal  transfers  of  property  to  officers 

or  stockholders  when  the  company  is  insolvent  or 
threatened  with  insolvency. 

5.  In  case  of  dissolution,  as  trustees,  for  all  corporation 

property  that  may  come  into  their  hands. 

In  most  of  the  above  cases  the  directors  offending  would 
be  liable  to  a  criminal  prosecution  as  well  as  a  civil  action. 
Any  director  dissenting  from  the  acts  of  the  majority  may,  by 
proper  procedure,  relieve  himself  from  responsibility.  He 
must,  however,  have  his  dissent  or  protest  recorded  on  the 
minutes,  or,  if  this  is  refused,  he  must  without  delay  publish 
such  protest. 


DIRECTORS.  69 

§  78.  Liabilities  of  Directors  under  New  Jersey  Law. 

Under  the  New  Jersey  statutes,  directors  make  themselves 
personally  responsible  for  the  debts  of  the  company  under  the 
following  circumstances : 

1.  If  they  loan  the  company's  funds  to  stockholders. 

2.  If  they  declare  dividends  except  from  net  profits. 

3.  If  they  issue  false  certificates  or  notices. 

4.  If  they  fail  to  give  the  statutory  notice  of  a  decrease 

of  capital  stock. 

In  most  other  states  much  the  same  liabilities  are  imposed 
by  statute. 

§  79.  Liabilities  of  Directors  under  Common  Law. 

Apart  from  any  state  laws,  directors  are  liable  personally 
for  loss  or  damage  resulting  from  any  action  authorized  by 
them  that  is  beyond  their  powers,  or  the  powers  of  the  com- 
pany ;  also  for  any  corporate  fraud,  trespass,  or  other  unlawful 
act,  committed  with  their  connivance,  assent  or  knowledge. 
They  would  also  be  held  liable  for  issuing  stock  as  full-paid 
when  it  has  not  been  fully  paid,  or  for  any  other  gross  mis- 
management. Directors  are  held  liable  for  paying  dividends 
that  impair  the  capital  stock,  whether  it  be  done  negligently 
or  wilfully.  Directors  are  also  generally  held  liable  to  the 
corporation  for  any  negligence  or  default  in  attending  to  the 
corporate  affairs.  They  are  trustees  for  the  company,  and 
as  such  are  bound  to  give  its  affairs  all  requisite  care  and  atten- 
tion. Their  failure  to  do  this  makes  them  responsible  for  any 
resulting  loss  or  damage. 

§  80.  General. 

It  may  be  said  in  general  that  the  directors  of  a  company, 
being  trustees  of  its  property,  are  expected  to  manage  its  affairs 
carefully  and  discreetly,  and  as  a  prudent  business  man  would 
manage  his  own  business.  As  a  trustee,  a  director  must  have 
no  interest  adverse  to  the  interests  of  the  company,  and  he 


70  CORPORATE    MANAGEMENT. 

should  not  be  personally  involved  in  any  contract  or  business 
in  which  the  company  is  concerned.  Any  objecting  stockholder 
may  have  a  contract  between  a  director  and  the  company  set 
aside  if  he  can  show  any  reasonable  ground  therefor. 

It  may  be  said,  however,  that  the  law  as  to  the  liabilities 
and  obligations  of  directors  is  much  more  satisfactory  than 
the  practice.  The  majority  of  corporate  frauds  occur  through 
lack  of  honor  and  honesty,  or  lack  of  attention  to  the  business, 
upon  the  part  of  the  directors,  and,  unfortunately,  in  such  cases 
it  is  costly  and  difficult  to  bring  the  responsible  parties  to 
account.  It  is  far  better  to  avoid  any  such  contingency  by  elect- 
ing as  directors  only  men  of  probity  and  character. 


CHAPTER  VII. 
OFFICERS. 


(BY-LAWS.) 
§  81.  Enumeration,  Election  and  Qualifications. 

"  The  officers  of  the  Company  shall  be  a  President, 
Vice-President.  Treasurer,  Secretary,  General  Manager 
and  Counsel.  These  officers  shall  be  elected  by  the 
Board  of  Directors  at  their  first  regular  meeting  after 
the  election  of  directors  each  year,  and  shall  hold  office 
for  the  term  of  one  year  and  until  their  respective 
successors  are  duly  elected  and  qualify.  The  President 
and  Vice-President  shall  be  elected  from  among  the 
members  of  the  Board  of  Directors."  Art.  IV,  §  I, 
By-laws. 

The  absolutely  necessary  officers  of  a  corporation  are  the 
president,  treasurer  and  secretary.  To  these  a  vice-president 
is  customarily  added  to  serve  in  the  absence  or  disability  of  the 
president.  Beyond  these,  when  desired,  and  more  particularly 
in  the  larger  corporations,  are  vice-presidents,  assistant  treas- 
urers and  secretaries,  also  a  general  manager  or  managing 
director,  and  sometimes  an  auditor  and  counsel  for  the  company. 
All  these  are  officers  of  the  company.  Those  employed  under 
them  are  ranked  as  agents  and  employees.  Two  offices,  where 
they  can  be  combined  to  advantage,  are  frequently  held  by  one 
person.  Directors  are  not  properly  officers  of  the  company, 
though  frequently  referred  to  as  such. 

It  is  necessary  that  the  president  and  vice-president,  as  the 
presiding  officers  of  the  board,  be  members  of  that  body.  To 
elect  one  not  a  member  of  the  board  as  president  would  lead  to 
awkward  complications.  The  other  officers  may  or  may  not 
be  members  of  the  board. 

71 


72  CORPORATE    MANAGEMENT. 

In  conducting  elections  of  officers,  ballots  should  be  pro- 
vided by  the  secretary  upon  which  the  respective  votes  of  the 
directors  are  recorded.  The  president  appoints  tellers,  usually 
two  in  number,  who  collect  the  ballots,  count  them  and  report 
the  results  to  the  president,  who  then  announces  the  names  of 
the  officers  elected.  In  the  smaller  corporations  the  newly 
elected  officials  are  usually  installed  in  their  offices  at  once  and 
take  charge  of  the  meeting.  In  the  larger  companies 
the  transfer  'of  office  to  the  officers-elect  is  generally  more 
formal,  and  takes  place  after  the  close  of  the  meeting.  (See 


§  82.  Vacancies  and  Removals. 

As  has  been  seen  under  the  by-law  provisions  in  Section 
71,  Chap.  VI,  the  directors  have  power  to  fill  vacancies  and  to 
remove  any  officer  at  pleasure.  Officers  cannot  be  removed 
without  cause  unless  the  by-laws,  the  charter,  or  the  statutes 
of  the  state,  give  such  power  of  removal  in  express  terms.  In 
New  York,  by  statute,  a  majority  of  the  directors  at  any  legal 
meeting  of  the  board  may  remove  officers  with  or  without 
cause. 

Where  this  power  of  removal  is  not  conferred  by  statute, 
charter  or  by-laws,  and  an  officer  becomes  obnoxious  to  a 
majority  of  the  stockholders  and  directors,  all  effective  power 
may  be  taken  from  him  by  the  passage  of  appropriate  by-laws 
and  resolutions.  In  like  manner,  should  the  proper  officer 
refuse  to  act,  power  might  be  given  to  any  other  officer  or  agent 
to  do  whatever  was  necessary. 

It  should  be  noted  that  by-laws  giving  to  directors  or  stock- 
holders the  power  to  remove  officers  without  cause  would  not 
be  effective  as  to  officers  already  elected,  but  would  apply  in 
the  case  of  all  officers  elected  after  the  passage  of  such  by-law. 

§  83.  The  President. 

(<  The  President,  when  present,  shall  preside  at  all 
meetings   of   the    stockholders   and    of   the    Board    of 


OFFICERS.  73 

Directors;  shall  sign  all  certificates  of  stock;  shall  sign, 
or  countersign,  as  may  be  necessary,  all  such  bills,  notes, 
checks,  contracts  and  other  instruments  as  may  pertain 
to  the  ordinary  course  of  the  Company's  business,  and 
sign,  when  duly  authorized  thereto,  all  contracts,  orders, 
deeds,  liens,  licenses  and  other  instruments  of  a  special 
nature. 

"  He  may  also,  in  the  absence  or  disability  of  the 
Treasurer,  endorse  checks,  drafts  and  other  negotiable 
instruments,  for  deposit  or  collection,  and  shall,  with  the 
Secretary,  sign  the  minutes  of  all  meetings  over  which 
he  may  have  presided. 

"  At  the  first  regular  meeting  of  the  Board  in  Janu- 
ary he  shall  submit  a  complete  report  of  the  operations 
of  the  Company  for  the  preceding  year,  together  with 
a  statement  of  the  Company  affairs  as  existing  at  the 
close  of  such  year,  and  shall  submit  a  similar  report  at 
the  annual  meeting  of  stockholders ;  also,  he  shall  report 
to  the  Board  of  Directors,  from  time  to  time,  all  such 
matters  coming  within  his  notice  and  relating  to  the 
interests  of  the  Company  as  should  be  brought  to  the 
attention  of  the  Board. 

"  He  shall  be,  ex  officio,  a  member  of  all  standing 
committees,  shall  have  such  usual  powers  of  supervision 
and  management  as  may  pertain  to  the  office  of  Presi- 
dent, and  perform  such  other  duties  as  may  be  properly 
required  of  him  by  the  Board  of  Directors. 

"  (He  shall  have  the  general  supervision  and  direc- 
tion of  the  other  officers  of  the  Company  and  shall  see 
that  their  duties  are  properly  performed.) 

"  (At  the  end  of  each  year  he  shall  have  an  audit 
made  of  the  books  and  accounts  of  the  Company  by  a 
qualified  public  accountant,  whose  report  shall  be  sub- 
mitted to  the  annual  meeting  of  stockholders  and  to  the 
Board  of  Directors.) 

"  (He  shall  receive  for  his  services  such  compensa- 
tion, not  exceeding  twenty-four  hundred  dollars  per 
annum,  as  may  be  fixed  by  the  Board  of  Directors.)" 
Art.  IV,  §  2. 

This  section  goes  so  much  further  into  detail  than  is  usually 
necessary  that  little  comment  is  required.     The  paragraphs 


74  CORPORATE    MANAGEMENT. 

given  in  parenthesis  are  inserted  or  omitted  according  to  cir- 
cumstances. They  explain  themselves. 

The  president  is  supposed  to  be  the  most  important  officer 
of  the  corporation,  and  should  be  ordinarily  a  man  of  excep- 
tional ability  in  the  particular  business  of  his  corporation.  It 
often  happens,  though,  that  the  president  is  chosen  by  reason 
of  his  reputation  in  other  lines,  and  merely  serves  as  a  figure- 
head. This  is  not  prejudicial  if  others  in  the  corps  of  officers 
possess  the  requisite  executive  ability  to  properly  conduct  the 
company's  business. 

The  board  may  at  any  time  lay  additional  duties  upon  the 
president;  and,  as  the  official  head  of  the  company,  many  things 
devolve  upon  him  from  time  to  time  that  cannot  be  specified  in 
advance.  Should  he  be  in  doubt  as  to  his  power  or  duty  in 
any  particular  matter,  he  may  relieve  himself  from  the  responsi- 
bility of  a  decision  by  calling  upon  the  board  for  instructions. 

Legally  the  president  has  no  power  to  buy,  sell  or  contract 
for  the  corporation  except  in  the  regular  routine  of  business, 
unless  authorized  by  resolution  of  the  board,  or  unless,  from 
his  previous  action  as  the  authorized  agent  of  the  company 
in  particular  directions,  such  authority  may  be  rightly  inferred. 
He  has  no  power  to  execute  a  corporate  deed,  a  mortgage,  an 
assignment  of  property,  license  or  other  formal  instrument,  or 
to  bind  the  company  by  a  promissory  note,  outside  the  ordinary 
course  of  business,  unless  expressly  authorized  to  do  so. 

For  example,  the  president  of  a  realty  company  could  exe- 
cute a  deed  without  express  authority  because  in  the  ordinary 
course  of  his  business,  but  the  president  of  a  manufacturing 
company  could  not  execute  a  deed  unless  expressly  authorized 
thereto. 

It  has  been  decided,  however,  that,  where  the  president  is 
authorized  to  attend  to  any  particular  business,  he  is  authorized 
to  make  all  contracts  and  to  do  everything  that  is  usual  or 
necessary  in  the  course  of  such  business.  Also  in  actual  practice 
the  president  is  so  commonly  authorized  to  act  generally  for 
the  company  that  his  powers  are  considerable;  and  unless  it 


OFFICERS.  75 

was  shown  that  he  had  gone  clearly  outside  of  his  usual  course 
of  business,  his  contract  would  bind  the  company.  Also  any 
act  or  contract  of  the  president,  even  in  excess  of  his  authority, 
may  be  ratified  by  the  action  or  assent  of  the  board,  and  without 
this  would  bind  the  company  if  it  accepted  the  benefits  of  such 
act  or  contract. 

The  president's  annual  reports  to  the  stockholders  and 
directors  should  always  be  an  intelligent  presentation  of  the 
real  condition  and  business  situation  of  the  corporation.  The 
president  is  also  usually  responsible  for  such  reports  to  the 
state  officials  as  are  required  by  the  state  laws.  While  it  is 
the  duty  of  the  secretary  and  treasurer  to  do  all  the  clerical 
labor  and  to  furnish  the  necesary  statistics  and  information 
for  these  reports,  the  president  should  supervise  the  matter, 
and  satisfy  himself  as  to  their  accuracy  and  completeness. 

It  is  not  usual  to  limit  the  president's  salary  in  the  by-laws, 
but  such  provision  would  in  many  cases  prevent  the  excessive 
salaries  that  are  paid  to  such  officers.  The  president  and  other 
officers  should  in  all  cases  have  a  fair  recompense  for  their 
services,  but  should  not  be  allowed  to  divide  the  profits  of  the 
company  under  guise  of  salaries;  unless,  as  is  sometimes  the 
case  in  small  corporations,  all  the  stockholders  are  officers,  and 
by  fair  agreement  arrange  to  divide  the  profits  in  the  shape 
of  salaries  rather  than  as  dividends. 

§  84.  The  Vice-President. 

'  The  Vice-President  shall  familiarize  himself  with 
the  affairs  of  the  Company,  and,  in  the  absence,  disability 
or  refusal  to  act  of  the  President,  shall  possess  all  of 
the  powers  and  perform  all  of  the  duties  of  that  officer." 
Art.  IV,  §  3,  By-laws. 

This  section  defines  the  position  of  the  vice-president.  The 
absence,  or  disability,  or  refusal  to  act  of  the  president  should 
be  undoubted,  and  there  should  be  a  real  necessity  for  taking 
action  in  order  to  justify  the  vice-president  in  assuming  the 
office  of  the  president.  Where  the  vice-president  rightly 


76  CORPORATE    MANAGEMENT. 

assumes  the  office  of  president  he  is  entitled  to  possess  and 
exercise  every  power  of  that  official  as  fully  as  would  the  presi- 
dent himself. 

§  85.  The  Secretary. 

"  The  Secretary  shall  keep  full  minutes  of  all  meet- 
ings of  the  stockholders  and  of  the  Board  of  Directors ; 
shall  read  such  minutes  at  the  proper  subsequent  meet- 
ings; shall  issue  all  calls  for  meetings  and  notify  all 
officers  and  directors  of  their  election ;  shall  have  charge 
of  and  keep  the  seal  of  the  corporation  and  affix  the  same 
to  certificates  of  stock  when  such  certificates  are  signed 
by  the  President  and  Treasurer,  and  shall  affix  the  seal, 
attested  by  his  signature,  to  such  other  instruments  as 
may  require  the  same. 

"  He  shall  keep  the  stock  certificate  book  and  the 
other  usual  corporation  books,  and  shall  prepare,  record, 
transfer,  issue,  seal  and  cancel  certificates  of  stock  as 
required  by  the  transactions  of  the  Company  and  its 
stockholders. 

"  He  shall  make  such  reports  to  the  Board  of 
Directors  as  they  may  request,  and  shall  also  prepare 
such  reports  and  statements  as  are  required  by  the  laws 
of  New  York.  He  shall  make  out  twenty  days  before 
any  election  of  directors  a  complete  list  of  the  stock- 
holders entitled  to  vote  at  such  election,  arranged  in 
alphabetical  order  and  giving  the  number  of  shares  of 
stock  that  may  be  voted  by  each,  and  shall  keep  the  same 
open  to  inspection  at  the  office  of  the  Company  until  the 
time  of  and  during  the  said  election.  He  shall  allow 
any  stockholder,  on  application  in  business  hours,  to 
inspect  the  stock  certificate  book,  the  stock  transfer  book 
and  the  stock  ledger. 

"  He  shall  attend  to  such  correspondence  and  to  such 
other  duties  as  may  be  incidental  to  his  office  or  be 
properly  assigned  him  by  the  Board. 

("  He  shall  receive  such  salary,  not  exceeding  twelve 
hundred  dollars  per  annum,  as  may  be  fixed  by  the  Board 
of  Directors.")  Art.  IV,  §  4,  By-laws. 
The  duties  of  the  secretary  are  well  summarized  in  the  by- 
law as  given.    Fuller  details  will  be  found  in  Chapters  XII  to 


OFFICERS.  77 


XVI;  also  in  that  part  of  Chapter  IX  relating  to  the  custody 
and  use  of  the  corporate  seal. 


§  86.  The  Treasurer. 

"  The  Treasurer  shall  have  the  custody  of,  and  be 
responsible  for,  all  moneys  and  securities  of  the  Com- 
pany; shall  keep  full  and  accurate  records  and  accounts 
in  books  belonging  to  the  Company,  showing  the  trans- 
actions of  the  Company,  its  accounts,  liabilities  and 
financial  condition,  and  shall  see  that  all  expenditures 
are  duly  authorized  and  are  evidenced  by  proper  receipts 
and  vouchers.  He  shall  deposit  in  the  name  of  the  Com- 
pany in  such  depository  or  depositories  as  are  approved 
by  the  Directors,  all  moneys  that  may  come  into  his 
hands  for  the  Company  account.  His  books  and 
accounts  shall  be  open  at  all  times  during  business  hours 
to  the  inspection  of  any  Director  of  the  Company. 

"  The  Treasurer  shall  also  endorse  for  collection  or 
deposit  all  bills,  notes,  checks  and  other  negotiable  instru- 
ments of  the  Company:  shall  pay  out  money  as  may  be 
necessary  in  the  transactions  of  the  Company,  either  by 
special  or  general  direction  of  the  Board  of  Directors, 
and  on  checks  signed  by  the  President  and  himself,  and 
shall  generally,  together  with  the  President,  have  super- 
vision of  the  finances  of  the  Company. 

"  He  shall  also  make  a  full  report  of  the  financial 
condition  of  the  Company  for  the  annual  meeting  of 
stockholders,  and  shall  make  such  other  reports  and 
statements  as  may  be  required  of  him  by  the  Board  of 
Directors  or  by  the  laws  of  the  State. 

"  He  shall  give  bond  in  the  sum  of  five  thousand 
dollars,  with  sureties  satisfactory  to  the  Board  of 
Directors,  for  the  faithful  performance  of  his  duties  and 
for  the  restoration  to  the  Company  in  event  of  his  death, 
resignation  or  removal  from  office,  of  all  books,  papers, 
vouchers,  money  and  other  property  belonging  to  the 
Company  that  may  have  come  into  his  custody. 

"  He  shall  receive  such  compensation,  not  exceeding 
eighteen  hundred  dollars  per  annum,  as  may  be  fixed  by 
the  Board  of  Directors."  Art.  IV,  §  5,  By-laws. 


78  CORPORATE    MANAGEMENT. 

The  treasurer  is  responsible  for  the  safety  of  the  corporate 
funds  and  property  and  for  the  due  record  of  all  its  financial 
transactions.  In  a  small  corporation  he  would  be  its  book- 
keeper; in  a  larger  company  he  would  supervise  the  clerical 
force.  The  treasurer  has  no  power  to  bind  the  company  by 
contract  except  as  specially  authorized,  or  authorized  by 
custom  or  practice. 

Whatever  arrangement  is  made  as  to  the  payment  of  money 
and  the  signature  of  checks  should  be  stated  clearly  in  the 
by-laws.  At  the  first  meeting  of  the  directors,  a  resolution 
should  be  passed  in  accordance  with  these  by-law  provisions, 
directing  that  the  funds  of  the  company  be  deposited  in  a 
certain  bank  or  banks,  in  the  name  of  the  company  and  subject 
to  its  check  when  signed  by  such  officer  or  officers  as  are  desig- 
nated. (See  Form  35.)  The  secretary  should  then  prepare 
a  certified  transcript  of  this  resolution  (See  Form  129),  which 
would  be  filed  with  the  proper  officials  of  the  bank  or  banks 
designated,  together  with  the  signatures  provided  for  in  the 
resolution.  Under  no  circumstances  should  the  treasurer 
deposit  any  funds  of  the  company  in  his  own  name,  or  even  in 
his  name  as  treasurer,  or  in  any  manner  mingle  corporate 
funds  with  his  own.  The  funds  of  the  company  should  be 
deposited  only  in  the  corporate  name. 

If  the  treasurer  is  to  handle  any  amount  of  money,  he 
should  give  bond  for  its  safekeeping.  The  security  of  some 
regular  guarantee  company  will  be  most  satisfactory.  If  it  is 
merely  provided  that  he  shall  give  security  satisfactory  to  the 
board  of  directors,  it  rests  with  the  board  to  make  sure  that 
this  security  is  real  and  not  nominal.  (For  Treasurer's  Bond, 
see  Form  153.) 

§  87.  Managing  Director. 

"  The  Board  of  Directors  may,  at  their  discretion, 
appoint  one  of  their  number  Managing  Director,  and  for 
such  time  as  he  shall  fill  said  office  he  shall  have  control 
and  supervision  of  the  general  business  affairs  of  the 


OFFICERS.  79 

Company,  and  shall  exercise  all  such  authority  in  the 
conduct  thereof  as  the  President  of  the  Company  would 
otherwise  have  or  exercise." 

Where  the  president  is  not  able,  or  does  not  care,  to  give 
the  time  and  attention  needed  for  the  direct  supervision  and 
management  of  the  company,  it  is  frequently  found  advan- 
tageous to  appoint  one  of  the  board  managing  director.  Also 
such  official  is  sometimes  appointed  to  take  charge  of  the 
business  of  a  company  during  the  temporary  absence  or  disa- 
bility of  the  president.  The  arrangement  is  a  very  convenient 
one  under  circumstances  that  often  arise  in  the  course  of 
corporate  business. 

The  position  of  managing  director  is  one  of  much  greater 
dignity  than  the  position  of  general  manager,  though  his  duties 
may  include  those  generally  assigned  this  latter  official.  The 
managing  director  is  the  representative  of  the  board,  delegated 
to  take  charge  of  the  active  business  of  the  company,  and  as 
such  he  may  be  given  all  the  power  of  the  board  itself.  In  all 
matters  connected  with  the  conduct  of  the  corporate  business 
the  position  is  usually  the  equivalent  of  the  place  and  authority 
of  the  president;  whereas  the  position  of  general  manager  is 
one  of  comparative  subordination.  Under  the  by-law  given, 
the  board  should  appoint  by  resolution  (See  Form  38),  and  the 
term  of  appointment  should  be  definitely  stated;  also  any 
special  compensation  to  be  given  the  managing  director  should 
be  specified.  The  authority  delegated  may  be  made  greater 
or  it  may  be  limited  by  changing  the  form  of  the  by-law. 

§  88.  General  Manager. 

(<  The  General  Manager  shall,  under  the  supervision 
of  the  Board  of  Directors  and  the  President,  have  charge 
of  and  manage  the  active  business  operations  of  the 
Company.  He  shall  perform  such  other  duties  as  may 
be  required  of  him  by  the  Board  of  Directors,  and  shall 
receive  such  salary,  not  exceeding  twenty-four  hundred 
dollars  per  annum,  as  may  be  fixed  by  the  Board."  Art. 
IV,  §  6?  By-laws. 


80  CORPORATE    MANAGEMENT. 

The  general  manager,  while  an  officer  of  the  company,  is 
not  so  in  the  sense  that  the  president,  secretary  and  treasurer 
are,  as  he  has  no  concern  with  the  corporate  affairs  or  finances. 
He  is  appointed  to  take  charge  of  its  ordinary  business,  which 
he  manages  exactly  as  he  would  were  he  working  for  a  firm 
or  an  individual.  His  powers  and  duties  are  limited  to  the 
transaction  of  the  particular  business  in  which  the  company 
is  engaged,  and  only  so  far  as  is  necessary  to  carry  on  routine 
business  has  he  any  power  to  contract  for  the  company. 

Unless  called  upon  by  the  board  to  make  reports  direct  to 
it,  the  general  manager  would  properly  report  to  the  president 
and  receive  directions  from  him.  He  should  be  a  practical 
man,  able  to  manage  employees  and  skilled  in  the  particular 
business  carried  on  by  the  corporation. 

If  the  general  manager  should  be  unsatisfactory,  his  re- 
moval would  depend  entirely  upon  the  nature  of  his  contract 
with  the  corporation  and  would  be  governed  by  the  usual  laws 
relating  to  contracts  of  employment. 

§  89.  Counsel. 

"  Counsel  of  the  Company  shall  prepare  all  such  con- 
tracts and  agreements  required  in  the  business  of  the 
Company  as  may  be  referred  to  him  by  its  officers;  and 
shall  inspect  and  pass  upon  all  such  instruments  pre- 
sented to  the  Company  as  may  be  of  sufficient  importance 
to  justify  such  examination;  also,  he  shall  advise  with 
the  officers  of  the  Company  in  all  such  legal  matters 
pertaining  to  the  affairs  of  the  Company  as  may  require 
his  consideration.  He  shall  receive  such  annual  retainer, 
not  exceeding  six  hundred  dollars  per  annum,  as  may  be 
fixed  by  the  Board  of  Directors."  Art.  IV,  §  7,  By- 
laws. 

The  duties  of  counsel  are  well  outlined  in  the  by-law  as 
given.  He  has  no  authority  in  company  affairs,  except  in 
connection  with  litigation  which  the  board  of  directors  have 
authorized  him  to  undertake,  or  in  special  matters  in  which 
he  has  been  empowered  to  act.  His  principal  duty  is  to  advise 
and  counsel  with  the  officers  of  the  company,  in  order  to  avoid 


OFFICERS.  81 

litigation  and  other  complications.  The  annual  retainer  paid 
him  depends  on  the  amount  of  work  involved,  ranging  from 
fifty  dollars  upward.  Sometimes  payment  is  made  entirely 
contingent  on  services  rendered;  usually,  however,  a  retainer 
is  paid  for  the  privilege  of  advice  and  consultation,  with  the 
understanding  that  drafting  contracts,  conducting  litigation, 
or  other  active  legal  assistance,  shall  be  paid  for  in  addition  at 
regular  rates. 

§  90.  Liabilities  of  Officers. 

Officers  of  corporations  are  liable  generally  for  damages 
resulting  from  their  negligence  or  wrongdoing  in  connection 
with  their  official  duties.  In  addition  to  this,  in  the  various 
states,  special  liabilities  are  imposed  by  statute.  For  example, 
the  officers^ of  a  New  York  corporation,  or  of  a  foreign  cor- 
poration doing  business  in  New  York,  are  by  statute  liable  as 
follows : 

1.  For  wilful  neglect  or  refusal  to  make  any  proper 
entry  in  the  stock  books  of  the  Company,  or  neglect  or 
refusal  to  exhibit  the  same  to  those  entitled  to  inspect 
them,   an  officer  shall   forfeit  to  the  party  injured  a 
penalty  of  fifty  dollars  and  shall  pay  all  damages  result- 
ing from  such  neglect  or  refusal.     (Stock  Corp.  Law, 

§29.) 

2.  For  making  any  certificate,  report  or  public  notice 
that  is  false  in  any  material  feature,  the  officers  and 
directors  signing  the  same  shall,  if  any  loss  or  damage 
ensue  therefrom,  be  personally  liable  to  any  person  who 
becomes  a  creditor  or  stockholder  upon  the  faith  thereof. 
(Stock  Corp.  Law,  §  31.) 

3.  For  any  loan  or  discount  to  a  stockholder  from 
corporate  funds,  or  for  receiving  any  note  or  evidence  of 
debt  in  payment  of  amounts  due  on  stock,  or  for  receiv- 
ing or  discounting  the  same  from  corporation  funds  to 
enable   any   stockholder   to   withdraw   money   paid    on 
account  of  stock,  the  officers  and  directors  implicated 
shall  be  personally  liable  for  all  debts  of  the  corporation 
to  the  full  amount  involved,  until  such  amount  shall  be 
repaid  with  interest.    (Stock  Corp.  Law,  §  25.) 

6 


82  CORPORATE    MANAGEMENT. 

•In  addition  to  the  foregoing  liabilities,  in  New  York,  as 
in  many  of  the  other  states,  severe  criminal  laws  exist  against 
most  kinds  of  official  misbehavior  or  fraud.  It  should  be  espe- 
cially noted  that  in  New  York  any  officer  or  employee  of  a 
corporation  who  "  falsifies,  or  unlawfully  and  corruptly  alters, 
erases,  obliterates  or  destroys  any  accounts,  books  of  accounts, 
records  or  other  writing  belonging  to,  or  appertaining  to  the 
business  of  the  corporation  "  is  guilty  of  forgery.  "  Making 
a  false  entry  "  or  "  wilfully  omitting  to  make  a  true  entry  of 
any  material  particular  "  "  with  intent  to  defraud  or  conceal 
any  larceny  or  misappropriation  "  is  likewise  held  to  be  for- 
gery. 

The  New  Jersey  laws  specify  the  following  liabilities  that 
may  be  incurred  by  the  secretary  or  other  officers  of  a  corpora- 
tion: 

I.  Any  officer  refusing  inspection  of  the  stock  or 
transfer  books  to  a  stockholder  shall  forfeit  two  hundred 
dollars.  (Gen.  Corp.  Law,  §  33.) 

2..  No  loan  shall  be  made  by  the  company  to  any 
stockholder  or  officer  of  the  company.  If  made,  the 
officer  who  makes  or  assents  thereto,  shall,  until  such 
loan  is  repaid,  be  liable  to  that  extent  for  the  debts  of 
the  corporation.  (Gen.  Corp.  Law,  §  48.) 

3.  Any  officer  signing  any  certificate  or  public  notice 
that  is  false  shall  be  personally  liable  for  all  debts  of  the 
corporation  contracted  while  he  remains  an  officer  or 
stockholder    of    the    corporation.     (Gen.    Corp.    Law, 

§52.) 

4.  The  annual  report  to  the  assessors  shall  be  signed 
by  the  president,  treasurer  or  secretary,  and  if  any  false 
statements  be  made  therein,  said  officers  shall  be  deemed 
guilty  of  perjury. 

The  criminal  laws  of  New  Jersey  are  as  severe  as  those  of 
New  York  in  the  penalties  imposed  generally  upon  the  offenses 
of  corporate  officers. 


OFFICERS.  83 

§  91.  General. 

Chairman  of  the  Board. — In  addition  to  the  officers  already 
named,  provision  is  sometimes  made  for  a  chairman  of  the 
board,  whose  duty  is  to  preside  at  all  meetings  of  the  board, 
and  to  advise  and  counsel  with  the  president  and  other  officers. 
In  some  cases,  he  is  given  much  of  the  authority  that  usually 
belongs  to  the  president,  and  the  president  is  practically  made 
a  subordinate  officer.  Generally  speaking,  it  would  seem  that 
the  president  could,  with  the  assistance  of  the  vice-president, 
do  everything  necessary  in  this  direction,  and  that  the  real 
purpose  in  creating  the  office  of  chairman  of  the  board  is  to 
provide  for  that  official  a  dignified  position. 

Auditor. — In  the  larger  corporations  it  is  customary  to  elect 
an  auditor,  whose  duty  it  is  to  supervise  the  whole  system  of 
accounts,  finance  and  business  records.  Such  officer  should  of 
necessity  be  an  expert  accountant. 

Auditing  Committee. — It  is  customary  in  some  corporations 
to  appoint  an  auditing  committee  to  go  over  the  books  and 
accounts  of  the  company  at  stated  times  and  report  their 
condition  to  the  stockholders.  As  the  gentlemen  appointed  on 
this  committee  usually  have  business  of  their  own,  are  probably 
personal  friends  of  the  officers,  and  are  not  likely  to  have  the 
skill  to  properly  examine  corporate  books,  it  is  but  rarely  that 
their  examination  amounts  to  more  than  a  cursory  inspection 
of  the  books  and  a  perfunctory  report  that  everything  appears 
to  be  in  good  shape.  If  an  examination  is  deemed  necessary, 
it  should  be  made  by  a  professional  accountant,  whose  reputa- 
tion will  not  allow  him  to  report  anything  but  the  exact 
conditions.  Among  the  clauses  defining  the  duties  of  the 
president  in  Section  83  is  a  provision  that  he  shall  have  an 
annual  audit  made  by  a  competent  accountant,  whose  report 
shall  be  submitted  to  the  stockholders  and  directors.  This  is 
far  superior  to  the  superficial  examination  and  report  made  by 
the  usual  auditing  committee. 


84  CORPORATE   MANAGEMENT. 

De  Facto  Officers. — If  any  one  connected  with  a  corporation 
is  allowed  to  publicly  act  as  an  officer  or  agent  of  such  corpora- 
tion, he  is  a  de  facto  officer,  even  though  he  has  no  legal  right 
to  the  position.  Persons  dealing  with  a  corporation  cannot 
investigate  and  ascertain  whether  those  who  are  representing 
it  have  been  legally  appointed;  therefore  the  law  holds  that 
the  acts  of  a  de  facto  officer  are  binding  on  the  company.  That 
is,  if  the  stockholders  of  a  company  allow  any  one  to  represent 
it,  outsiders  are  justified  in  assuming  that  such  representative 
has  been  legally  appointed,  even  though  this  may  not  be  the 
case.  In  the  same  way,  if  the  directors  were  not  legally  elected, 
they  could  still  bind  the  corporation  until  proper  legal,  proceed- 
ings were  instituted  for  their  removal.  Their  contracts  would 
be  valid  as  long  as  they  were  allowed  to  act. 


CHAPTER  VIII. 
DIVIDENDS  AND  FINANCE. 


(BY-LAWS.) 
§  92.  Dividends. 

"  Dividends  shall  be  declared  at  such  times  as  the 
Board  may  direct,  but  no  dividend  shall  be  declared  or 
paid  save  from  surplus  profits  remaining  after  all  current 
liabilities  of  the  Company  have  been  fully  paid ;  nor  shall 
any  dividend  be  declared  that  will  impair  the  capital  of 
the  Company."  Art.  V,  §  i,  By-laws. 

The  provision  as  to  payment  of  dividends  from  profits  is 
both  statute  and  common  law.  It  is  of  the  essential  nature  of 
dividends  that  they  are  to  be  paid  only  out  of  profits.  Any  divi- 
dend that  is  not  so  paid  would  of  necessity  impair  the  capital, 
and  would  therefore  be  illegal.  Directors  make  themselves 
personally  liable  by  declaring  any  such  illegal  dividends;  and, 
should  the  company  become  insolvent,  the  stockholder  who 
receives  such  a  dividend  may  be  compelled  to  repay  it.  If  an 
illegal  dividend  is  contemplated,  any  stockholder  may  enjoin 
its  declaration  and  payment. 

Surplus  funds  or  profits  on  hand  are  not  dividends,  as  a 
dividend  does  not  exist  until  it  has  been  declared  by  the  board 
of  directors.  Once  legally  declared,  however,  the  funds 
involved  cease  to  belong  to  the  company  and  become  the  prop- 
erty of  the  shareholders  of  record.  The  corporation  cannot 
refuse  to  pay  such  declared  dividends  out  to  them,  if  demanded. 
Where  the  real  owner  of  stock  has  neglected  to  have  it  trans- 
ferred to  his  name  on  the  books  of  the  company,  he  cannot 

85 


86  CORPORATE    MANAGEMENT. 

claim  dividends  himself,  as  these  will  have  been  credited  to  the 
holder  of  record.  To  this  latter  he  must  look  for  relief. 

Where  stock  has  been  pledged,  the  dividends  should  be  paid 
to  the  pledgee,  if  the  company  has  been  notified  of  such  pledge 
and  has  been  properly  authorized  thereto.  If  the  company  has 
not  been  notified  and  the  stock  remains  in  the  name  of  the 
pledgor,  the  company  would  pay  any  dividends  to  the  latter, 
and  leave  the  pledgor  and  the  pledgee  to  settle  the  matter 
between  themselves. 

Dividends  must  always  be  equal,  as  between  holders  of  the 
same  class  of  stock.  If  preferred  stock  has  been  issued,  its 
dividends  would  be  paid  before  anything  was  paid  on  common 
stock,  but  if  the  profits  only  suffice  for  a  partial  payment  of 
the  preferred  dividend,  each  holder  would  receive  the  same 
proportionate  amount.  Particular  holders  cannot  be  favored 
either  in  time  of  payment  or  amount  paid. 

§  93.  Reserve  Fund. 

"  No  dividend  to  exceed  six  per  cent,  per  annum 
shall  be  declared  by  the  Board  of  Directors  until  there 
shall  have  been  accumulated  from  surplus  profits  a 
reserve  fund  of  ten  thousand  dollars,  such  fund  to  be 
used  for  the  extension  or  enlargement  of  the  business 
of  the  Company  and  the  betterment  of  its  plant,  or  for 
such  other  purposes  as  may  be  necessary  or  advisable." 
Art.  V,  §  2,  By-laws. 

This  by-law  is  intended  to  limit  the  paying  out  of  the  entire 
profits  as  dividends  until  a  suitable  reserve  fund  or  working 
capital  has  been  accumulated.  In  the  State  of  New  Jersey, 
unless  the  charter  or  by-laws  contain  some  such  provision  as 
the  foregoing,  the  directors  are  compelled  by  law  annually  to 
pay  out  as  dividends  all  profits  to  the  last  cent.  In  New  York, 
and  in  most,  other  states,  the  directors  would  have  the  power 
to  withhold  dividends  and  accumulate  a  reserve  fund,  even 
though  there  were  no  such  by-law.  Under  any  circumstances, 
it  is  usually  advisable  to  have  a  by-law  giving  a  definite  amount 
that  is  to  be  accumulated  before  large  dividends  are  paid. 


DIVIDENDS    AND    FINANCE.  87 

§  94.  Debt. 

"  No  debt  shall  be  contracted,  nor  liability  incurred, 
nor  contract  made  by  or  on  behalf  of  this  Company  in 
excess  of  one  thousand  dollars  unless  the  same  be  author- 
ized or  directed  by  the  by-laws  or  by  a  duly  recorded 
two-thirds  vote  of  the  entire  Board  of  Directors  at  a 
regular  meeting,  or  at  a  special  meeting  called  for  the 
purpose."  Art.  V,  §  3,  By-laws. 

The  advisability  of  having  such  a  limitation  upon  the 
power  of  the  directors  and  officers  to  contract  debt,  and  the 
limit  to  be  fixed,  depend  upon  the  circumstances  of  the  com- 
pany. If,  in  defiance  of  this  limitation,  debts  were  contracted 
beyond  the  allowed  amount,  the  directors  and  officers  concerned 
would  be  personally  responsible. 

In  the  absence  of  any  such  limitation,  the  directors  of  a 
company  have  in  most  states  unrestricted  power  to  incur  debt 
or  borrow  money.  In  New  York,  however,  the  directors  cannot 
mortgage  the  property  of  the  company  unless  authorized  to  do 
so  by  the  holders  of  two-thirds  of  the  outstanding  stock.  In 
New  Jersey  there  is  no  such  restriction,  but  it  is  always  cus- 
tomary to  authorize  a  mortgage  of  corporate  property  by  a  vote 
of  the  stockholders. 

The  general  subject  of  the  issue  of  bonds  is  not  considered 
at  length  in  this  work,  on  account  of  the  space  required  for 
adequate  presentation,  but  an  approved  form  of  deed  of  trust 
(including  forms  of  bond  and  coupon)  with  comment  thereon, 
will  be  found  in  Chapter  XLIV. 

§  95.  Bank  Deposits. 

'''  The  Treasurer  shall  deposit  the  moneys  of  the 
Company  as  the  same  may  come  into  his  hands,  in  such 
depository  or  depositories  as  may  be  designated  by  the 
Board  of  Directors,  and  such  deposits  shall  be  made  in 
the  name  of  the  Company  and  moneys  shall  be  withdrawn 
therefrom  only  by  check  signed  by  the  Treasurer  and 
countersigned  by  the  President."  Art.  V,  §  4,  By-laws. 


CORPORATE  MANAGEMENT. 

The  board  of  directors  should  designate  the  bank  or  trust 
company  in  which  the  funds  of  the  company  are  to  be  deposited 
by  passing  suitable  resolutions  at  their  first  meeting.  (See 
Form  35.)  A  copy  of  this  resolution,  duly  certified  by  the 
secretary,  should  be  given  to  the  bank.  (See  §  86  and  Form 
129.) 

§  96.  Surplus. 

"  Any  surplus  funds  accumulated  above  such  average 
balance  as  may  be  necessarily  maintained  for  the  busi- 
ness of  the  Company,  and  in  excess  of  the  reserve  fund 
and  of  dividends  declared  or  to  be  declared  for  the 
current  year,  shall  be  invested  in  securities  approved  by 
the  Board  of  Directors."  Art.  V,  §  5,  By-laws. 

This  section  gives  directions  for  the  investment  of  funds, 
over  and  above  dividends,  working  capital  and  reserve  fund. 
It  is  necessary  in  very  few  corporations. 


CHAPTER  IX. 
SUNDRY    PROVISIONS. 


(BY-LAWS.) 
§  97.  Corporate  Seal. 

"  The  corporate  seal  of  the  Company  shall  consist  of 
two  concentric  circles,  between  which  shall  be  the  name 
of  the  Company,  and  in  the  centre  shall  be  inscribed 
'  Incorporated  1903,  New  York/  and  such  seal,  as 
impressed  on  the  margin  hereof,  is  hereby  adopted  as 
the  corporate  seal  of  the  Company."  Art.  VI,  §  I,  By- 
laws. 

The  corporate  seal  is  used  in  all  those  cases  in  which  an 
individual  would  use  a  seal,  as  in  the  execution  of  deeds,  bonds, 
mortgages  and  the  like;  also,  on  all  certificates  of  stock.  It 
should  likewise  be  used  to  authenticate  transcripts  from  the 
by-laws  and  minutes.  In  the  execution  of  any  important 
instrument  it  is  safe  to  affix  the  seal,  though  ordinary  contracts 
relating  to  personal  property  and  the  employment  of  agents 
and  officers  are  held  to  bind  the  corporation  without  being 
sealed.  The  imprint  of  a  seal  on  an  instrument  could  not 
under  any  circumstances  lessen  its  legality  in  any  way. 

The  mere  impression  of  the  seal  upon  the  paper,  without 
wax  or  wafer,  is  sufficient.  Gilt  and  colored  seals  are  often 
affixed  to  stock  certificates  to  add  to  their  impressiveness. 
Almost  any  device  or  impression  used  with  the  intent  to  serve 
as  a  seal  will  be  recognized  as  such  by  the  courts. 

The  secretary,  by  virtue  of  his  office,  is  the  custodian  of  the 
seal,  and  it  is  his  duty  to  affix  it  to  all  certificates,  instruments 


90  CORPORATE    MANAGEMENT. 

and  contracts  where  customary,  or  where  he  has  been  directed 
so  to  do.  When  he  signs  an  instrument  as  an  officer  of  the 
corporation  he  merely  adds  the  impression  of  the  seal  without 
formal  attestation,  as  shown  in  Form  103.  Where  the  instru- 
ment is  signed  by  other  officers  or  agents,  and  the  secretary 
does  not  sign,  but  merely  affixes  the  seal,  he  should  attest  the 
impression  by  his  signature  as  shown  in  Form  104.  In  event 
of  the  absence,  death  or  disability  of  the  secretary,  or  under 
any  circumstances,  any  other  officer  or  agent  of  the  company 
might  affix  the  seal,  if  authorized  thereto  by  the  board  of 
directors.  (See  further  §  152.) 

§  98.  Penalties. 

"  Any  officer,  director  or  stockholder  who  shall  dis- 
obey or  violate  any  of  the  provisions  of  these  by-laws 
shall  be  fined  in  an  amount  not  to  exceed  twenty  dollars, 
such  fine  to  be  imposed  by  the  Board  of  Directors,  and,  if 
not  paid  at  the  time,  to  be  deducted  from  any  salary  or 
dividend  then  due  or  that  may  thereafter  become  due 
said  person."  Art.  VI,  §  2,  By-laws. 

In  regard  to  the  matter  of  enforcing  by-laws  by  means  of 
penalties,  see  comment  in  Section  36,  "  Enforcement  of  By- 
laws." 

§  99.  Amendments. 

"  These  by-laws  may  be  amended,  repealed  or  altered, 
in  whole  or  in  part,  at  any  regular  meeting  of  the  stock- 
holders, or  at  any  special  meeting,  where  such  action 
has  been  duly  announced  in  the  call,  provided  that  a 
majority  of  the  entire  voting  stock  of  the  Company 
shall  vote  for  such  amendment,  repeal  or  alteration." 
Art.  VI,  §  3,  By-laws. 

The  by-law  as  given  requires  a  majority  of  all  outstanding 
stock  to  amend  the  by-laws.  The  usual  provision  for  amend- 
ment of  by-laws  requires  only  a  majority  of  the  stock  present 
at  the  meeting.  It  is  questionable  whether  amendment  by  so 
small  a  Droportion  of  the  voting  stock  is  advisable. 


SUNDRY   PROVISIONS.  91 

In  many  of  the  large  New  Jersey  corporations  the  power 
to  amend  by-laws  is  given  unreservedly  to  the  board  of  direc- 
tors, and  the  by-law  regulating  amendments  reads  simply : 

"  The  Board  of  Directors,  by  a  vote  of  a  majority  of 
the  entire  membership,  may  alter  or  amend  these  by- 
laws at  any  regular  meeting  of  the  Board." 

But  provision  must  have  been  made  in  the  charter  of  the 
company  to  make  such  a  by-law  effective.  (See  §  73.) 

If  by-laws  are  to  be  amended  at  a  special  meeting,  it  is 
preferable  that  the  call  for  such  meeting  and  the  resolution 
adopted  at  the  meeting  by  which  the  change  is  made,  should 
set  forth  both  the  existing  by-law  and  the  proposed  amend- 
ment. (See  Form  73.) 

§  100.  Parliamentary  Law. 

In  all  matters  of  procedure  where  the  by-laws  do  not  pre- 
scribe the  action  to  be  taken,  recourse  must  be  had  to  the  ordi- 
nary rules  of  parliamentary  law.  Where  meetings  are  fre- 
quent, the  by-laws  sometimes  provide  that  some  particular 
work,  such  as  "  Robert's  Rules  of  Order "  or  "  Cushing's 
Manual,"  shall  govern  in  all  matters  of  procedure  not  other- 
wise determined.  Where  this  is  not  done,  it  is  nevertheless 
the  duty  of  the  president  to  enforce  the  usual  parliamentary 
laws  and  to  preserve  order  and  decorum  in  all  actions  and  pro- 
ceedings of  the  stockholders  and  directors. 

§  101.  General. 

More  care  should  be  exercised  in  the  preparation  of  by-laws 
than  is  usually  given.  Generally  a  ready-made  set  of  by-laws 
is  taken,  a  few  names  and  dates  inserted,  and  the  set  is  adopted. 
This  off-hand  method  of  providing  by-laws  is  one  reason  for 
the  demand  that  power  to  make  and  amend  be  given  the 
directors.  The  by-laws  being  a  misfit  from  the  start,  restrict 
the  working  power  of  the  company  and  require  constant  amend- 
ment. 


92  CORPORATE    MANAGEMENT. 

To  arrange  a  set  of  working  by-laws  for  a  company  requires 
a  good  general  knowledge  of  the  corporation  laws  of  the  partic- 
ular state,  and  of  the  course  of  business  of  the  proposed  corpo- 
ration. Nothing  that  is  needless  should  be  included  and  nothing 
necessary  should  be  omitted.  If  this  is  done,  the  corporate 
machinery  will  run  smoothly,  and  misunderstandings  and  pos- 
sible litigation  will  be  avoided. 

If  the  requisite  skill  and  ability  for  this  cannot  be  secured, 
the  next  best  plan  is  to  adopt  the  simplest  set  of  by-laws  pos- 
sible, and  make  changes  and  additions  from  time  to  time  as 
the  necessity  arises.  The  short  set  given  in  Form  21  is  recom- 
mended for  this  purpose.  If  more  detail  is  needed,  careful 
study  of  the  by-laws  hereinbefore  considered  (which  are  given 
as  a  whole  in  Form  22),  the  statute  law  of  the  state,  and  the 
business  requirements  of  the  particular  corporation,  should 
furnish  materials  for  the  compilation  of  an  excellent  working 
set. 


PART  IIL— PROCEDURE* 

CHAPTER  X. 
STOCKHOLDERS'  ANNUAL  MEETING. 


(See  Minutes  "  Stockholders'  Annual  Meeting,"  Form  98.) 

§  1 02.  Preliminaries. 

The  matters  requiring  the  secretary's  attention  preliminary 
to  the  annual  meeting  of  stockholders  are  as  follows : 

1.  Closing  of  transfer  book  and  preparation  of  lists 
of  stockholders.     (See  Forms  64,  65.) 

2.  Notice  of  meeting,  and,  in  New  York,  advertise- 
ment of  same.     ( See  Forms  87,  88. ) 

3.  Preparation  of  outline  minutes,  blanks  for  inspect- 
ors' oaths  and  certificates,  etc.     (See  Forms  62,  66,  and 
67-70.) 

The  corporate  calendar  (See  §  155  and  Forms  155  and 
156)  should  show  the  exact  date  on  which  the  transfer  books 
are  to  be  closed,  notices  to  be  sent  out  and  advertisement  of 
meeting,  if  any,  published. 

Closing  Books. — The  object  in  closing  the  books  to  trans- 
fers prior  to  the  annual  meeting  is  to  give  the  secretary  time 
to  prepare  his  lists  of  stockholders  and  so  avoid  any  uncertainty 
as  to  who  is  entitled  to  vote  at  that  meeting.  The  date,  prior 
to  the  meeting,  on  which  the  transfer  books  are  closed  is  usually 
fixed  by  the  statutes  or  the  by-laws.  For  New  York  corpora- 
tions this  date  may  be  any  number  of  days  prior  to  the  meeting 

93 


94  CORPORATE    MANAGEMENT. 

not  exceeding  forty.    For  New  Jersey  it  may  be  any  reasonable 
number  of  days  prior  to  the  meeting  not  less  than  twenty. 

No  formality  attends  the  closing  of  the  books,  and  no  entry 
thereof  is  made  upon  the  books,  the  secretary  merely  refusing 
to  transfer  any  certificate  presented  to  him  for  that  purpose 
during  the  specified  period.  Where  notice  of  the  annual  meet- 
ing is  given  by  publication,  such  notice  usually  gives  the  dates 
for  the  closing  and  the  reopening  of  the  transfer  book. 

Publication. — In  regard  to  advertising  the  annual  meetings 
of  New  York  corporations,  it  should  be  noticed  that  while  news- 
paper publication  of  notice  of  meeting  is  required  by  statute, 
and  while  such  notice  is  usually  given  by  the  larger  corpora- 
tions, no  penalty  is  provided  for  non-observance  of  the  statute, 
and  in  the  smaller  corporations  the  published  notice  is  very 
generally  omitted.  In  such  case  particular  care  should  be  taken 
to  duly  notify  every  stockholder  by  mail,  or  by  any  other  means 
specified  in  the  by-laws,  of  the  time  and  place  of  meeting. 
Unless  there  is  entire  acquiescence  on  the  part  of  the  stock- 
holders, the  statutory  provision  as  to  publication  should  be 
observed.  Copies  of  papers  in  which  the  advertisement  of  the 
meeting  appears  should  be  preserved  by  the  secretary.  (Form 
88.) 

Notice. — The  notice  of  annual  meeting  should  be  sent  to 
the  last  known  address  of  each  stockholder  on  the  specified 
date,  and  a  copy  of  the  notice  as  sent  with  date  of  sending 
endorsed  thereon,  should  be  preserved  by  the  secretary  as  evi- 
dence, if  needed,  that  proper  notice  of  the  meeting  was  given. 
If  the  notice  of  the  meeting  was  published,  copies  of  the  papers 
in  which  such  notice  appeared  should  also  be  preserved  by  the 
secretary.  (See  §  52  and  Form  87.) 

Proxies. — Acting  under  instructions  from  the  board  or 
president,  the  secretary  frequently  sends  out  with  the  notice  of 
meeting  blank  proxy  forms  inviting  each  stockholder,  if  unable 
to  be  present  at  such  meeting,  to  sign  and  send  in  the  proxy. 
The  proxies  when  returned  are  usually  signed  in  blank ;  that  is, 


STOCKHOLDERS'    ANNUAL    MEETING.  95 

with  the  name  of  the  proxy  omitted.  The  name  of  the  secre- 
tary, or  some  one  else  present  at  the  meeting,  is  then  inserted 
so  as  to  make  the  instrument  complete,  and  in  this  manner  a 
quorum  is  often  secured  when  otherwise  the  annual  meeting 
would  fail  for  lack  of  such  quorum.  (See  Chap.  XXII.) 

The  alphabetical  lists  of  stockholders  are  taken  from  the 
stock  books  after  these  are  closed  to  transfer,  and  show  the 
number  of  votes  that  may  be  cast  and  who  is  entitled  to  cast 
them.  In  New  Jersey  the  alphabetical  list  of  stockholders  is 
required  by  statute ;  in  New  York  and  most  of  the  other  states 
it  is  merely  a  convenience.  This  list  should  be  presented  by 
the  secretary  to  the  meeting,  should  be  open  to  the  inspec- 
tion of  any  stockholder,  and  is  referred  to  in  case  of  any 
uncertainty  as  to  who  is  entitled  to  vote,  or  as  to  the  number 
of  votes  any  stockholder  is  entitled  to  cast.  The  company 
stock  books  are,  however,  the  final  authority  in  any  such 
matters  and  should  be  readily  accessible  for  reference  in 
case  the  accuracy  of  the  list  is  impugned,  or  any  other  ques- 
tion arises  necessitating  their  use. 

Outline  minutes  will  be  found  advantageous  for  the  secre- 
tary's own  use,  covering  all  routine  business,  so  that  a  few 
short  pencil  notes  will  usually  suffice  to  dispose  of  the  whole, 
leaving  tlve  secretary  free  to  attend  to  new  or  special  busi- 
ness, or  anything  else  that  may  come  up  to  demand  his  ser- 
vices. Outline  minutes  are  usually  arranged  on  loose  sheets 
of  paper,  with  additional  blank  sheets  for  the  notes  of  any 
other  business  transacted.  (See  §§  143,  144  and  Form  66.) 

Inspectors  of  Election. — Both  in  New  York  and  New  Jer- 
sey the  election  of  directors  is  conducted  by  inspectors,  and 
the  secretary  should  provide  the  blanks  in  advance  for 
inspectors'  oath  and  certificate.  It  is  the  secretary's  duty  to 
see  that  all  stationery,  blanks,  materials  and  any  books  or 
documents  in  his  possession  that  may  be  needed  at  the  meet- 
ing are  on  hand  or  readily  accessible ;  and  he  should  make 


CORPORATE    MANAGEMENT. 


his  arrangements  with  care,  so  that  no  delays  in  the  meeting 
shall  occur  through  his  negligence.    (See  Chap.  XXIX.) 

Order  of  Business. — A  copy  of  the  order  of  business  should 
be  prepared  in  advance  by  the  secretary  and  handed  to  the 
president  before  the  meeting  is  called  to  order.  It  serves  to 
guide  the  president  in  the  conduct  of  the  meeting  and  pre- 
vents the  omission  of  matters  that  without  it  might  be  over- 
looked. (§  58  and  Form  62.) 

§  103.  Opening  the  Meeting. 

Where  the  by-laws  provide  that  the  president  and  secre- 
tary of  the  company  shall  officiate  at  stockholders'  meetings 
the  proceedings  are  much  simplified.  At  the  appointed  time 
and  place  the  president,  as  a  matter  of  course,  requests  the 
meeting  to  come  to  order,  and  the  secretary,  if  he  has  not 
already  done  so,  should  then  lay  before  the  president  the 
order  of  business,  copied  on  a  card  or  in  other  convenient 
form,  together  with  the  list  of  stockholders. 

Should  the  president  fail  to  appear  at  the  time  of  meet- 
ing, the  vice-president  would  preside,  conducting  the  meet- 
ing in  all  respects  as  would  the  president.  Should  the  vice- 
president  also  be  absent,  the  next  officer  in  due  order  who 
might  be  present  (See  §  57)  would  serve. 

Where  the  by-laws  make  no  provision  for  officers  of 
stockholders'  meetings,  the  stockholders  will  themselves,  for 
each  meeting,  elect  or  appoint  a  chairman  and  any  other 
necessary  officers.  Such  officers  would  take  full  charge  of 
the  meeting  and  would  sign  the  minutes  of  such  meeting.  It 
is  customary  for  the  secretary  of  the  company  to  be  ap- 
pointed at  such  meetings  as  the  secretary  of  the  meeting  in 
order  to  avoid  the  embarrassment  necessarily  resulting  from 
the  appointment  of  one  not  familiar  with  the  stockholders 
and  the  stock  records  of  the  company.  (See  §§  114,  122.) 

The  minutes  should  give  a  concise  statement  of  all  the 
essential  proceedings  of  the  meeting.  If  the  regular  officers 


STOCKHOLDERS'  ANNUAL  MEETING.  97 

of  the  company  were  in  charge,  the  opening  entry  might 
properly  be  as  follows: 

"  The  stockholders  of  the  Armor  Automatic  Brake 
Company  met  in  annual  meeting  in  the  office  of  the  Com- 
pany, 56  Liberty  Street,  New  York  City,  at  10  A.  M., 
January  5th,  1903. 

"  The  meeting  was  called  to  order  by  Milton  D. 
Armor,  President  of  the  Company.  Henry  M.  Sage, 
Secretary  of  the  Company,  acted  as  Secretary  of  the 
meeting." 

Should  the  by-laws  not  provide  that  the  regular  officers 
take  charge  of  the  meeting,  the  latter  portion  of  the  entry 
would  vary  in  accordance  with  the  facts  and  might  be  as 
follows : 

"  The  meeting  was  called  to  order  by  Mr.  J.  C.  Field, 
who  3-tated  that  the  first  business  before  the  meeting  was 
the  election  of  a  Chairman.  Upon  motion,  duly  seconded 
and  unanimously  carried,  Mr.  John  Adams  was  chosen 
Chairman  of  the  meeting.  Mr.  Adams  at  once  took  the 
Chair  and,  in  the  absence  of  objection  thereto,  appointed 
Henry  M.  Sage,  Secretary  of  the  Company,  as  the  Sec- 
retary of  the  meeting." 

§  104.  Roll  Call. 

The  presiding  officer  would,  after  the  opening  prelimi- 
naries, request  the  secretary  to  call  the  roll  and  report 
whether  a  quorum  were  present  or  represented.  Practice 
varies  as  to  the  precise  manner  of  roll-call.  Usually  the  sec- 
retary uses  an  alphabetical  list  prepared  for  the  purpose  (See 
Form  65)  and  calls  the  names  of  the  stockholders  therefrom. 
If  the  stockholder  whose  name  is  called  is  personally  present, 
he  responds  to  the  call  and  is  properly  noted  on  the  secre- 
tary's list.  If  not  present,  but  represented  by  proxy,  the 
party  representing  him  responds  as  his  proxy,  and  is  prop- 
erly noted  on  the  list. 

Were  the  number  of  the  stockholders  very  great,  while 
the  number  of  representatives  in  attendance  at  the  meeting 

7 


98  CORPORATE    MANAGEMENT 

were  small,  it  would  be  entirely  proper  for  the  secretary, 
instead  of  calling  off  every  name,  to  call  upon  each  person 
present  for  a  report  as  to  the  stock  owned  or  represented  by 
him.  The  stock  so  reported  would  be  noted  on  the  secre- 
tary's list,  and  any  stock  not  reported  would  be  noted  as 
not  represented.  In  this  way  the  secretary  would  get  the 
necessary  data  as  to  the  stock  represented  much  more  expe- 
ditiously  than  by  formal  roll-call. 

It  should  be  noted  that  the  important  point  to  be  deter- 
mined by  the  roll-call  is  not  the  number  of  persons  present 
at  the  meeting,  but  the  number  of  shares  of  stock  rep- 
resented. 

One  man  might  by  ownership  and  proxies  represent  the 
entire  stockholding  interests  of  the  company  at  a  meeting, 
and  such  meeting  if  properly  conducted  would  probably  be 
legal,  though  in  England  it  is  held  that  it  takes  two  to  make 
a  "  meeting." 

When  any  one  appears  as  a  proxy,  he  should  answer  to 
the  absentee's  name  on  roll-call  as  the  representative  of  such 
absentee ;  and  should,  either  previously  to  roll-call  or  at  the 
time,  file  his  proxy  with  the  secretary.  (See  Forms  23-30.) 
In  case  he  should  wish  to  preserve  his  original  proxy  for  sub- 
sequent use  or  reference,  he  should  file  a  duplicate  or  certi- 
fied copy  of  such  proxy  with  the  secretary,  at  the  same  time 
exhibiting  the  original  for  inspection  by  the  officers  of  the 
meeting. 

In  the  event  of  any  dispute  as  to  the  number  of  shares  to 
be  voted  by  any  person  present,  or  on  any  proxy,  reference 
would  be  made  to  the  stock  book,  which  would  be  final. 

After  completion  of  the  roll-call,  the  secretary  would  add 
the  different  columns  of  his  list  (see  Form  65),  enter  the 
footings,  and  announce  the  result  to  the  meeting  in  the  fol- 
lowing manner: 

"Present  in  person,  164  shares;  represented  by  proxy, 
210  shares;  total  represented,  374  shares;  not  represented, 
46  shares.  Total  shares  outstanding,  420.  Necessary  to  a 
quorum,  211  shares." 


STOCKHOLDERS'    ANNUAL    MEETING.  99 

A  quorum  being  present,  the  presiding  officer  announces 
the  fact  and  states  that  the  meeting  will  proceed  with  its 
business.  (§  55.) 

The  entry  in  the  minutes  would  be  as  follows : 

"  The  roll-call  showed  the  following  result : 

Present  in  person 164  shares 

Represented  by  proxies 210 


Total  represented 374 

Absent  and  not  represented 46 


Total  shares  outstanding 420 


Necessary  for  a  quorum 211 

The  President  thereupon  announced  that  a  quorum 
was  present  and  that  the  meeting  would  proceed  to  the 
next  order  of  business." 

Adjournment. — Should  the  roll-call  show  that  a  quorum 
was  not  present,  and  no  other  stockholders  could  be  found  to 
make  up  the  quorum,  the  meeting  might  simply  adjourn  sine 
die.  This  would  leave  the  existing  board  of  directors  to  hold 
over  until  the  next  annual  meeting,  or  until  a  special  meeting 
was  called  for  the  election  of  directors  and  the  transaction  of 
any  other  postponed  business.  Or  the  meeting  might  adjourn 
from  day  to  day  in  hopes  of  a  quorum  being  secured.  If  the 
latter  course  were  adopted,  no  notice  of  the  adjourned  meeting 
need  necessarily  be  sent  out,  this  latter  being  regarded  as  the 
same  meeting  as  the  one  from  which  it  was  adjourned  and  as 
therefore  not  requiring  any  further  notice.  It  is,  however,  the 
better  practice  for  the  secretary  to  send  out  notice  of  the  time 
and  place  of  such  adjourned  meeting,  as  otherwise  it  might  in 
some  instances  be  overlooked  and  forgotten.  (§§  55,  no.,) 

§  105.  Proof  of  Notice. 

After  roll-call  the  presiding  officer  would  inquire  of  the 
whether  due  notice  of  the  meeting  had  been  given 


100  CORPORATE  MANAGEMENT. 

In  response  to  this  the  secretary  should,  if  the  meeting  had 
been  advertised,  produce  copies  of  the  papers  containing  the 
advertisements,  and  should  also  submit  a  copy  of  the  notice 
sent  out  by  mail  with  a  certificate  attached  thereto  stating  that, 
on  such  a  date  (mentioning  date),  a  copy  of  the  notice  had  been 
mailed  to  the  last  known  address  of  each  stockholder  of  record, 
all  in  full  compliance  with  the  requirements  of  the  by-laws. 
This  certificate  might  be  in  writing  and  signed  by  the  secretary ; 
or,  in  a  very  formal  meeting,  might  be  attached  to  the  notice  in 
the  form  of  an  affidavit  This  affidavit  might  be  required  at 
any  meeting  if  a  dispute  as  to  the  sufficiency  or  legality  of 
notice  arose.  (See  Forms  125,  126,  127.) 
The  entry  in  minutes  would  be  as  follows : 

"  The  Secretary  then  submitted  copies  of  the  '  New 
York  Times/  dated  December  2Oth  and  December  27th, 
1902,  containing  due  advertisement  of  the  meeting,  and 
a  copy  of  the  notice  of  the  meeting,  with  certificate 
attached,  stating  that  copies  thereof  had  been  mailed  to 
each  stockholder  of  record  on  December  24th,  1902. 

"  No  objection  being  made,  the  proof  of  notice  as 
presented  was  ordered  received  and  filed." 

§  106.  Reading  of  Minutes. 

The  presiding  officer  would  then  call  for  the  reading  of 
minutes  of  the  previous  meeting,  and  in  response  the  secretary 
should  read  the  minutes  of  the  annual  meeting  held  in  the 
preceding  year;  also  the  minutes  of  any  special  meeting  or 
meetings  of  the  stockholders  held  during  the  year.  At  the 
close  of  the  reading  of  each  set  of  minutes  the  president  or 
chairman  would  announce,  "  If  there  is  no  objection,  the  min- 
utes as  read  will  stand  approved,"  or  the  same  object  might  be 
accomplished  by  passing  a  motion  that  the  minutes  as  read  be 
approved. 

If  any  immaterial  or  obviously  necessary  changes  in  the 
minutes  were  suggested,  and  no  objection  were  made  thereto, 
the  presiding  officer  would  merely  direct  the  secretary  to  make 


STOCKHOLDERS'  ANNUAL  MEETING.  101 

the  correction.  If  the  corrections  were  important,  motion 
should  be  made  to  correct  the  minutes  as  suggested.  If  the 
motion  prevailed,  the  minutes  would  be  ordered  amended. 
After  any  changes,  the  minutes  would  be  approved  "  as  cor- 
rected," in  the  absence  of  objection,  usually  by  order  of  the 
president  or  chairman,  otherwise  by  formal  motion.  (See 
§  140.) 

It  should  be  noted  that  the  minutes  of  an  annual  meeting 
are  not  read  and  approved  at  a  subsequent  special  meeting, 
though  this  might  be  legally  done  if  mentioned  in  the  call  for 
such  meeting;  nor  are  the  minutes  of  a  special  meeting  ap- 
proved at  a  following  special  meeting  unless  there  is  some  par- 
ticular reason  for  so  doing;  but  all  go  over  to  the  next  annual 
meeting,  when  they  should  be  read  and  finally  disposed  of. 
When  minutes  are  approved,  they  are  frequently  endorsed  by 
the  secretary,  "  Approved,  as  read,  at  the  annual  meeting  of 
stockholders  held  (January  10,  1902),"  or  "  Approved,  as  cor- 
rected, at  the  annual  meeting,  etc."  The  entry  for  approval  of 
minutes  should  be  as  follows : 

"  The  minutes  of  the  previous  meeting  were  read, 
and  no  objection  being  made,  were  ordered  to  stand 
approved." 
Or 

"  The  minutes  of  the  previous  meeting  were  read, 
and,  on  motion  duly  made  and  passed,  were  ordered  to 
stand  approved."  ( See  Chapter  XIV,  "Minutes.") 

Minutes  of  a  directors'  meeting  would  never  be  read  at  a 
stockholders'  meeting,  except  for  purposes  of  information,  and 
then  usually  by  special  motion  or  request.  (See  §  140.) 

§  107.  Annual  Reports. 

Following  the  president's  report  would  usually  come  the 
annual  reports.  The  president's  report  is  usually  considered 
first.  (See  Form  71.)  If  long,  and  the  contents  fairly  well 
known  to  the  stockholders,  or  if  it  were  to  be  printed  later  for 
distribution  among  the  stockholders,  the  president  would 


102  CORPORATE  MANAGEMENT. 

merely  present  his  report ;  otherwise  he  would  usually  not  only 
present  but  read  it.  In  either  case  a  motion  would  then  be  in 
order  that  the  report  be  received  and  filed,  or  that  it  be  received 
and  printed  for  distribution  among  the  stockholders,  or  that 
such  other  disposition  be  made  thereof  as  the  circumstances 
might  demand. 

Following  the  president's  report  would  usually  come  the 
treasurer's  report,  which  would  be  read  and  disposed  of  as 
might  be  deemed  best.  (See  Form  72.)  If  any  other  officers 
had  reports  to  make,  or  if  the  board  of  directors  or  any  com- 
mittee had  reports  to  submit,  such  reports  should  be  presented 
and  read,  or  acted  upon  without  reading,  at  this  time.  (See 
Form  73.) 

Usually  these  reports  are  discussed  and  questions  asked  and 
answered  concerning  them  before  they  are  formally  received. 
If  any  report  were  incomplete,  or  erroneous,  or  objectionable, 
motions  might  be  made  to  return  such  reports  for  correction, 
or  even  to  reject  them  absolutely.  The  usual  disposition,  how- 
ever, is  to  move  that  -the  reports  be  received  and  filed.  In  such 
case  the  secretary  takes  charge  of  such  reports  and  preserves 
them  for  future  reference.  If  the  reports  were  to  be  printed  or 
disposed  of  in  some  other  way,  usually  they  would  still  be 
entrusted  to  the  secretary,  who  would  be  instructed  as  to  their 
disposition.  When  it  is  desirable,  reports  may,  by  motion,  be 
ordered  spread  upon  the  minutes. 

Entries  in  the  minutes  would  be  as  follows : 

"  The  President  presented  and  read  his  annual  report, 
which  was,  after  some  informal  discussion  by  the  meet- 
ing, upon  motion,  ordered  received  and  filed. 

"  The  Treasurer's  report  was  then  presented  and 
read,  and,  upon  motion,  was  ordered  received  and  filed. 

"  The  Board  of  Directors  presented  a  special  report 
relating  to  the  construction  of  an  addition  to  the  factory 
of  the  Company  and  the  consequent  increase  of  the  Com- 
pany's indebtedness.  On  motion,  the  report  was  ordered 
received  and  filed."  (See  Forms,  Chap.  XXX.) 


STOCKHOLDERS'    ANNUAL    MEETING.  103 

§  1 08.  Election  of  Directors. 

The  next  business  before  the  meeting  would  be  the  election 
of  directors  for  the  ensuing  year.  In  New  York  and  New 
Jersey,  this  election  must  be  by  ballot,  and  is  conducted  by 
inspectors  of  election.  In  New  York  these  inspectors  are,  for 
the  first  election  of  directors,  appointed  by  the  board  of  direct- 
ors named  in  the  charter ;  but  thereafter  are,  as  in  New  Jersey, 
appointed  or  elected  in  such  manner  as  is  provided  by  the 
by-laws.  These  inspectors,  usually  two  in  number  (in  New 
York  the  number  must  be  two),  may  be  stockholders  or  other- 
wise, as  may  seem  best ;  but  officers  or  directors  of  the  company 
or  candidates  for  office  should  not  be  appointed.  The  inspectors 
must  be  sworn  to  the  faithful  discharge  of  their  duties  before 
a  notary  public  or  other  officer  authorized  to  administer  oaths. 
(Forms  67  to  70.) 

As  soon  as  appointed,  the  inspectors  of  election  take  entire 
charge  of  the  election,  receiving  and  counting  ballots,  and 
announcing  and  certifying  the  results  of  the  election.  They 
may  also  pass  upon  the  qualifications  of  voters  and  the  validity 
of  proxies,  without  regard  to  any  previous  acceptance  by  the 
secretary  or  president;  and  they  have  a  right  to  refer  to  the 
books  of  the  company,  if  necessary,  to  verify  any  claims  or 
statements.  In  New  York,  they  may  even  require  stockholders 
offering  to  vote  to  make  affidavit  that  they  have  not  been  bribed 
or  unduly  influenced  in  the  casting  of  their  votes. 

The  inspectors'  certificate  and  oath  for  both  New  York  and 
New  Jersey  will  be  found  under  Forms  67  to  70,  inclusive.  In 
New  York,  when  filled  out  and  completed,  this  certificate  and 
oath  must  be  filed  with  the  county  clerk  of  the  county  in  which 
the  election  is  held.  A  duplicate  should  also  be  made  out  and 
retained  by  the  secretary  for  his  file.  In  New  Jersey,  the  orig- 
inal is  merely  handed  to  the  secretary  for  preservation.  Either 
the  originals  or  certified  copies  of  any  proxy  should  also  be 
preserved  by  the  secretary  as  a  measure  of  precaution  in  case 
of  subsequent  investigation  of  the  details  of  the  election. 

In  practice,  the  appointment  of  inspectors  and  the  conduct 


104  CORPORATE  MANAGEMENT. 

of  the  election  of  directors  by  them  is  a  simple  formality,  and 
one  easily  carried  out  by  any  corporation.  In  many  cases,  how- 
ever, in  order  to  avoid  the  requirements  as  to  inspectors  and 
as  to  publication  of  notice,  the  smaller  New  York  corporations 
omit  to  elect  directors  at  the  annual  meeting,  simply  allow- 
ing the  old  board  to  hold  over,  any  vacancies  therein  being 
filled  by  the  vote  of  its  own  members.  As  long  as  there  is  no 
formal  objection  or  protest  against  this  on  the  part  of  the  stock- 
holders, the  status  of  the  directors  so  holding  over  is  unques- 
tionable, and  their  actions  are  perfectly  legal.  This  is  also 
true  of  New  Jersey,  and  of  most,  if  not  all,  of  the  other  states 
of  the  Union. 

Where  inspectors  of  election  are  not  required  by  statute,  the 
election  of  directors  is  a  very  simple  matter.  Usually,  by  statute 
or  by-law,  it  must  be  by  ballot,  and  the  president  will  appoint 
tellers  to  prepare,  distribute,  collect  and  count  these  ballots ;  or, 
in  the  absence  of  any  objection,  will  request  the  secretary  to 
do  all  this.  When  the  results  of  the  election  are  obtained,  they 
are  either  read  out  by  the  tellers,  or  are  handed  to  the  president 
to  be  read  out  by  him.  In  either  case,  after  the  reading  of  the 
vote  as  cast,  the  president  formally  announces  the  election  of 
the  parties  receiving  the  highest  votes;  the  record  thereof  is 
made  by  the  secretary ;  and,  as  far  as  the  meeting  is  concerned, 
the  matter  is  closed. 

The  entry  in  minutes  for  the  election  would  be  as  follows : 

"  The  next  business  being  the  election  of  five  Direct- 
ors to  serve  for  the  ensuing  year,  the  President  appointed 
two  inspectors,  Wm.  B.  Jackson  and  S.  M.  Hendricks; 
who,  being  first  duly  sworn,  conducted  the  election  of 
Directors  by  ballot,  and  reported  the  following  results 
of  the  said  election : 

Milton  D.  Armor 374  votes 

Henry  M.  Sage 374      " 

John  Adams 290      " 

Marshall  Manning 244      " 

Theodore  C.  Norton 198      " 

J.  C.  Field 185      " 


STOCKHOLDERS'   ANNUAL   MEETING.  105 

"  Milton  D.  Armor,  Henry  M.  Sage,  John  Adams, 
Marshall  Manning  and  Theodore  C.  Norton,  having 
received  the  greatest  number  of  votes,  were  declared 
elected  as  Directors  for  the  year  next  ensuing."  (See 
§540 

§  109.  Other  Business. 

Unfinished  business  is  next  in  the  regular  order.  It  includes 
any  matters  which  were  under  discussion  or  consideration  at 
any  prior  meeting,  regular  or  special,  and  which  were  not 
finally  disposed  of  thereat.  Any  matters  referred  to  committees 
for  consideration,  or  investigation  or  report,  or  any  matters 
upon  which  action  had  been  postponed,  would  come  under  this 
head  and  be  acted  upon  at  this  time. 

The  president,  or  chairman,  would  introduce  the  subject  by 
inquiring  if  there  were  any  unfinished  business  to  be  acted  upon 
by  the  meeting.  If  there  were  no  response,  it  would  be  entirely 
proper  for  the  president  himself  to  mention  any  matters  which 
were  under  previous  consideration  and  which  should  be  settled. 

Should  there  be  no  unfinished  business,  or  if  there  were,  so 
soon  as  it  was  completed  the  presiding  officer  would  pass  on  to 
the  next  order  of  business  and  inquire  if  there  were  any  new 
business  for  the  meeting  to  consider.  Under  this  head  would 
come  anything  requiring  the  attention  of  the  meeting,  such  as 
amendments  of  the  by-laws,  resolutions  authorizing  any  import- 
ant action,  calling  for  information,  etc.  If  the  directors  or 
officials  wished  to  take  any  unusually  important  action,  and 
did  not  wish  to  assume  the  sole  responsibility  therefor,  it  would 
be  brought  up,  discussed  and  acted  upon  at  this  time;  or,  if 
any  stockholder  wished  to  protest  against  any  action,  or  pro- 
posed action,  of  directors  or  officers,  he  could  with  propriety 
bring  it  up  for  discussion  at  this  stage  of  the  meeting. 

The  minutes  for  this  part  of  the  meeting  might  be  as 
follows : 

"  The  following  amendment  to  the  by-laws  was 
moved  by  Mr.  John  Harris  and  seconded  by  Mr.  Edwin 
L.  Smith,  and  was  adopted  unanimously : 


106  CORPORATE    MANAGEMENT. 

"  '  Resolved,  That  Section  8,  Article  III  of  the  By- 
laws, providing  for  the  election  of  officers  of  the  Com- 
pany by  the  Directors,  be  amended  by  adding  to  the  offices 
now  rilled  by  election  the  office  of  Assistant  Treasurer/  " 

§  no.  Adjournment. 

After  the  disposition  of  all  business  before  the  meeting, 
adjournment  is  in  order.  At  any  other  time  it  would  require 
a  motion  or  unanimous  consent  to  adjourn  a  meeting,  but,  at 
this  stage  of  the  proceedings,  the  president  or  chairman,  after 
inquiring  if  there  were  any  other  business  before  the  meeting, 
and  receiving  no  response,  would  merely  declare  the  meeting 
adjourned.  Quite  commonly  a  motion  is  made  at  this  time  to 
adjourn,  but  it  is  unnecessary. 

The  entry  in  the  minutes  would  be  as  follows : 

"  There  being  no  further  business  for  consideration, 
the  meeting  was  adjourned." 

Should,  however,  the  adjournment  not  be  sine  die,  or  final, 
but  merely  over  to  some  future  time,  as,  for  instance,  in  order 
to  obtain  fuller  data  in  regard  to  some  matter  before  final  action 
thereon,  or  to  await  the  results  of  some  official  action  in  some 
important  matter,  such  adjournment  should  be  by  motion,  duly 
seconded  and  passed. 

In  such  cases  the  entry  in  the  minutes  would  be  as  follows : 

"  Upon  motion  duly  made  and  carried,  the  meeting 
was  adjourned  to  Monday,  January  19,  at  10  A.  M." 

§  in.  Signing  the  Minutes. 

As  soon  after  the  meeting  as  is  convenient,  and  while  its 
details  are  fresh  in  his  mind,  the  secretary  should  take  his  notes 
and  rough  minutes  and  from  them  write  up  the  proceedings  of 
the  meeting  in  the  minute  book.  When  completed,  they  should 
be  signed  on  the  lower  right-hand  side  with  his  name  and 
official  designation.  It  is  not  essential  that  the  signature  of 
the  presiding  officer  be  also  affixed,  though  it  is  customary,  and 


STOCKHOLDERS'    ANNUAL    MEETING.  107 

of  much  advantage  in  event  of  any  subsequent  dispute  as  to 
the  accuracy  of  the  record.  (See  Chapter  XIV  on  the  general 
subject  of  Minutes.) 

§  112.  General. 

The  proceedings  outlined  in  the  present  chapter  are  for- 
mal, and  where  there  is  any  possibility  of  dispute  or  differ- 
ence of  opinion  amongst  the  stockholders  of  a  company, 
every  formality  indicated  should  be  carefully  observed.  Gen- 
erally, however,  and  especially  in  small  or  close  corporations, 
considerable  laxity  in. the  observance  of  formalities  is  prac- 
ticed, and,  where  all  interested  concur,  may  be  said  to  be 
allowable. 

The  object  of  formalities  is  to  protect  the  stockholders 
against  unexpected  actions  or  unfair  dealing;  hence,  if  all  the 
stockholders  agree  to  dispense  with  any  formality,  no  stock- 
holder is  injured  thereby,  and,  in  most  cases,  no  one  else  would 
have  a  right  to  object.  In  this  way  the  management  of  a 
small  or  close  corporation  may  be  made  almost  as  simple  as 
that  of  a  partnership.  The  election  of  directors  may  be  dis- 
pensed with,  leaving  the  old  board  to  hold  over,  or  even  the 
annual  meeting  itself  may  be  omitted,  and  special  meetings 
may  be  called  at  any  time  and  place,  and  for  any  purpose, 
and  without  further  notice  than  is  entirely  convenient. 

It  should  be  borne  in  mind,  however,  that  any  waiving  of 
formality  in  corporate  matters  depends  for  its  legality  and 
efficiency  upon  the  concurrence  of  every  one  interested ;  and 
in  every  case  where  this  is  done  waivers  should  be  prepared 
and  signed  by  all  interested  parties.  (For  forms  of  waivers 
see  "  Calls  and  Waivers,"  Chapter  XXXI.) 


CHAPTER   XI. 
STOCKHOLDERS'  SPECIAL  MEETING. 


(See  Minutes  "Stockholders'  Special  Meeting,"  Form  95.) 
§  113.  Preliminaries. 

The  annual  meeting  is  the  only  regular  meeting  of  stock- 
holders. All  other  meetings  are  special  meetings.  Such 
special  meetings  should  only  be  called  for  some  particular 
purpose  demanding  the  immediate  attention  of  the  stock- 
holders. 

Before  a  special  meeting  can  be  legally  held  it  must  be 
called  as  the  by-laws  may  provide,  by  the  president,  by  the 
directors,  or  by  a  certain  number  of  the  stockholders  them- 
selves. It  is  for  this  reason  that  special  meetings  are  fre- 
quently designated  as  "  called  meetings." 

The  call  for  a  special  meeting  must  specify  the  time,  place 
and  purpose  or  purposes  of  such  meeting  (see  Forms  80,  81, 
82,  83),  and,  after  being  signed  by  the  proper  parties,  is 
handed  to  the  secretary.  It  is  then  the  duty  of  this  official 
to  see  that  every  stockholder  has  due  and  timely  notice  of  the 
meeting.  If  one  single  stockholder  is  not  properly  notified, 
he  may  have  the  proceedings  at  such  special  meeting  set 
aside.  Hence  it  is  most  important  that  the  notices  of  special 
meetings  be  properly  drawn  and  sent  out  in  strict  accord- 
ance with  every  requirement. 

The  notice  must  specify  the  time,  place  and  purpose  or 
purposes  of  any  special  meeting,  and  no  business  other  than 
that  specified  in  the  call  may  be  transacted  at  such  meeting. 
(See  Form  85.) 

If  the  stockholders  are  not  too  numerous,  and  are  dis- 
posed to  expedite  the  business  of  the  company,  the  best 

108 


STOCKHOLDERS'   SPECIAL  MEETING  109 

method  of  calling  a  special  meeting  is  by  the  use  of  the  com- 
bined call  and  waiver.  (See  Form  77.)  If  this  instrument  is 
signed  by  all  the  stockholders,  the  meeting  can  be  held 
without  delay,  without  further  formality  and  without  any 
possibility  of  subsequent  trouble  in  regard  to  the  method  of 
assembling  the  stockholders  in  such  meeting. 

§  114.  Opening  the  Meeting. 

At  the  appointed  time,  as  in  the  case  of  the  regular  meet- 
ing, the  president,  or,  in  his  absence,  the  vice-president,  or 
next  officer  in  attendance,  would  call  the  meeting  to  order. 
If  by  any  mischance  none  of  the  officers  were  present,  or  if 
the  by-laws  did  not  authorize  the  regular  officers  to  act  at 
stockholders'  meetings,  a  chairman  would  be  appointed; 
any  one  of  the  stockholders  rising  and  moving  that  Mr. 
Henry  Evans,  or  whoever  the  desired  party  might  be,  should 
act  as  chairman  of  the  meeting.  When  seconded,  the  motion 
would  be  put  to  the  meeting  by  its  maker,  and,  if  carried, 
Mr.  Evans  would  take  the  chair  and  preside  over  the  meet- 
ing. In  the  absence  of  objection  thereto,  he  would  appoint 
some  one  present  to  act  as  secretary  of  the  meeting,  or  the 
secretary  might  also  be  appointed  by  motion. 

As  soon  as  the  meeting  was  called  to  order,  the  secretary 
should  lay  before  the  presiding  officer  the  order  of  business, 
which  would  be  the  same  as  for  a  regular  meeting  with  the 
omission  of  the  items  not  applicable. 

The  entry  in  the  minutes  would  be  as  follows : 

"  The  stockholders  of  the  Scott-Maynard  Printing 
Company  met  in  special  meeting  at  the  office  of  the  Com- 
pany, No.  15  Murray  Street,  New  York,  at  10.30  A.  M., 
on  Monday,  January  19,  1903,  pursuant  to  call  and  notice. 
"  The  President  being  absent,  the  meeting  was  called 
to  order  by  Marshal  Ingram,  Vice-President  of  the  Com- 
pany, and,  in  the  absence  of  the  Secretary,  Mr.  Douglas 
Vail  was  appointed  and  officiated  as  Secretary  pro  tern." 

§  115.  Roll  Call 

As  in  a  regular  meeting,  the  secretary  should  be  provided 
with  an  alphabetical  list  of  the  stockholders  (See  Form  65) 


110  CORPORATE    MANAGEMENT. 

arranged  for  roll-call,  and  ruled  with  columns  for  shares 
present  in  the  persons  of  their  owners,  shares  present  by 
proxy  and  shares  absent.  Upon  request  of  the  presiding 
officer,  he  would  call  the  roll  and  announce  the  results  to 
the  president  or  chairman.  If  the  shares  represented  in 
person  and  by  proxy  were  sufficient  to  constitute  a  quorum, 
the  presiding  officer  would  so  announce  to  the  meeting  and 
would  then  proceed  to  the  next  business  in  order. 

It  might  be  noted  that  the  alphabetical  list  of  stockholders 
required  by  statute  for  the  annual  meetings  of  stockholders 
in  New  Jersey  and  some  other  states  is  not  required  at  spe- 
cial meetings,  unless  for  the  personal  convenience  of  the 
secretary ;  any  disputes  as  to  the  voting  rights  of  those  pres- 
ent being  settled  by  direct  reference  to  the  stock  book.  For 
entry  in  minutes  see  Form  95. 

§  116.  Proof  of  Call  and  Notice. 

Upon  request  of  the  presiding  officer,  the  secretary  would 
then  produce  the  original  call  for  the  meeting,  duly  signed ; 
also  a  copy  of  the  notice  sent  out  pursuant  to  the  call,  with 
his  certificate  attached  showing  that  such  notice  had  been 
properly  addressed  and  mailed  to  every  stockholder  the 
necessary  number  of  days  before  the  date  of  the  meeting. 
These  documents  might  be  ordered  received  and  filed  as  in 
the  proceedings  of  the  regular  meeting,  or  might  be  ordered 
spread  upon  the  minutes. 

Where  the  meeting  has  been  assembled  by  means  of  the 
call  and  waiver,  this  document,  signed  by  all  the  stockholders 
of  the  company,  should  appear  in  full  on  the  minutes  and  may 
be  properly  included  by  the  secretary  without  instructions 
from  either  the  presiding  officer  or  the  meeting.  (See 
Form  91.) 

§  117.  Special  Business. 

Unless  so  specified  in  the  call  and  notice,  the  minutes  .of 
any  previous  meeting  could  not  be  properly  considered  at  a 
special  meeting.  Hence,  the  particular  business  for  which  the 


STOCKHOLDERS'    SPECIAL    MEETING.  Ill 

meeting  was  called  would  be  taken  up  at  once.  The  presiding 
officer,  or  some  one  requested  so  to  do  by  him,  should  state 
generally  the  purposes  of  the  meeting,  and  make  such  explana- 
tions as  might  be  necessary  of  the  nature  of  the  business  to  be 
transacted,  and  the  conditions  that  required  immediate  action 
and  justified  the  calling  of  a  special  meeting.  Or  the  presiding 
officer  might  call  upon  the  secretary  to  read  the  purposes  of  the 
meeting  from  the  notice  sent  out,  and  then  call  upon  some  one 
familiar  with  the  matter  to  explain  it  to  the  stockholders. 

After  such  statement  and  explanation,  and  any  discussion 
that  might  be  necessary,  some  one  interested  would  present  a 
resolution  covering  the  matter,  and  move  the  adoption  of  the 
resolution. 

For  example,  the  directors  might  have  received  an  offer 
for  the  purchase  of  the  entire  property  of  the  company  with  the 
proviso  that  such  proposition  must  be  acted  upon  at  once.  The 
directors  would  not  have  authority  to  close  the  matter,  nor 
could  it  be  held  over  until  the  next  annual  meeting;  hence,  if 
the  directors  considered  the  proposition  a  favorable  one,  the 
only  course  open  to  them  would  be  to  call  a  special  meeting  of 
the  stockholders  for  its  consideration.  At  the  meeting,  the 
matter  would  be  fully  explained  and  the  advantages  of  the 
proposition  pointed  out.  Then  some  one  favorably  disposed 
would  rise  and  present  a  resolution  authorizing  the  directors 
to  effect  such  sale,  and  move  the  adoption  of  the  resolution. 
Such  resolution  (See  Form  41)  should  be  drawn  up  in  advance 
of  the  meeting  and  be  prepared  with  great  care.  If  the  resolu- 
tion is  seconded,  it  is  then  before  the  meeting,  and  the  presiding 
officer  should  give  an  opportunity  for  its  discussion.  Usually, 
however,  in  matters  of  this  importance,  the  minds  of  those 
present  have  already  been  formed,  and,  except  in  case  of  oppo- 
sition, but  little  discussion  is  required. 

§  1 1 8.  Disposal  of  Special  Business. 

A  special  meeting  has  no  power  to  consider  or  act  upon 
anything  not  specified  in  the  call.  In  all  matters  specified  in 
the  call,  however,  it  has  the  fullest  liberty.  It  may  consider, 


112  CORPORATE  MANAGEMENT. 

accept,  reject,  amend,  limit  or  extend  the  scope  of  any  resolu- 
tion offered  in  such  matters,  or  dispose  of  such  resolution  in 
arty  other  parliamentary  way  desired.  Usually,  however,  a 
special  meeting  is  not  called  unless  it  is  known  that  the  pro- 
posed action  can  control  a  safe  majority.  In  such  case,  a  reso- 
lution will  be  offered  and  disposed  of,  with  but  little  debate  or 
delay,  and  the  business  of  the  meeting  be  brought  to  a  speedy 
conclusion. 

The  entry  in  the  minutes  would  be  as  follows : 

"  The  Chairman  then  stated  that  the  meeting  had  been 
called  to  consider  a  proposition  to  sell  the  downtown 
plant  of  the  Company,  and  explained  the  conditions  which 
made  the  proposed  sale  advisable.  After  a  brief  dis- 
cussion of  the  matter  the  following  resolution  was  offered 
by  Wm.  B.  Harter,  who  moved  its  adoption.  Motion 
seconded  by  Mr.  T.  B.  Mullaly. 

"  '  Whereas,  the  Board  of  Directors  of  this  Company 
has  received  a  cash  offer  of  thirty  thousand  dollars 
($30,000)  for  the  Murray  Street  Plant  of  this  Company ; 
and 

"  '  Whereas,  it  will  be  to  the  business  advantage  of 
this  Company  to  accept  the  said  proposition  and  utilize 
the  proceeds  of  such  sale  in  the  enlargement  of  the  Com- 
pany's Madison  Avenue  plant  and  in  the  general  promo- 
tion of  its  business ;  Now  therefore, 

"  '  Be  It  Resolved,  That  the  Directors  of  this  Com- 
pany be  hereby  authorized  and  empowered  to  sell  the 
entire  printing  plant  of  this  Company  now  located  in  the 
premises  No.  15  Murray  Street,  New  York  City,  for 
such  consideration,  not  less  than  thirty  thousand  dollars 
($30,000),  and  on  such  reasonable  terms  as  may  to  said 
Directors  seem  advisable. 

"  '  That  the  Directors  of  this  Company  be  hereby 
further  authorized  and  empowered  to  so  use  the  proceeds 
of  such  sale  in  the  enlargement  of  the  Company's  Madi- 
son Avenue  plant  and  in  the  general  promotion  of  its 
business  as  may  seem  to  said  Directors  necessary  and 
advisable.' ' 

§  119.  Adjournment. 

No  business  may  be  brought  up  at  a  special  meeting  for 
discussion  and  action  save  that  specifically  mentioned  in  the 


STOCKHOLDERS'    SPECIAL    MEETING.  113 

call  and  notice.  Under  these  circumstances,  as  soon  as  the 
particular  business  for  which  the  meeting  was  called  is  disposed 
of,  nothing  is  left  but  adjournment.  This  may  be  by  motion, 
or  the  president  may  merely  state  that,  no  further  business 
being  before  the  meeting,  it  stands  adjourned.  The  entry  in 
the  minutes  would  be : 

"  There  being  no  further  business,  the  meeting  was 
declared  adjourned." 

§  120.  General. 

As  has  been  said,  where  the  signature  of  all  the  stockholders 
can  be  secured,  special  meetings  are  best  held  pursuant  to  call 
and  waiver.  Under  such  circumstances  much  less  formality 
is  necessary,  and  the  range  of  the  meetings  is  considerably  ex- 
tended without  danger  of  the  proceedings  being  later  impeached 
by  some  discontented  stockholder.  Where  the  call  and  waiver 
cannot  be  used  on  account  of  the  large  number  of  stockholders, 
or  the  unwillingness  of  some  to  sign  the  instrument,  every 
formality  should  be  observed  with  care.  Any  omission  might 
invalidate  the  actions  of  the  meeting.  It  should  be  noted  that 
the  signature  of  every  stockholder  is  required  to  make  the  call 
and  waiver  effective. 

The  first  meeting  of  stockholders  is  merely  a  form  of  special 
meeting.  In  the  absence  of  by-laws  then  existing,  there  are  no 
provisions  for  special  meetings,  and  the  first  or  organization 
meeting1  is  almost  necessarily  assembled  by  call  and  waiver, 
signed  by  all  those  entitled  to  be  present  at  the  first  meeting  of 
the  new  company.  The  same  rule  prevails  in  the  first  meeting 
as  in  other  special  meetings,  that  all  business  to  be  transacted 
thereat  must  be  mentioned  in  the  call. 

The  order  of  business  at  a  first  meeting  differs  somewhat 
from  the  regular  order  as  the  company  is  without  organization 
of  any  kind,  and  the  conditions  are  such  as  would  prevail  at  no 
other  meeting.  For  the  proceedings  of  a  first  or  organization 
meeting  see  Chapter  XXXIV. 
8 


CHAPTER  XII. 
DIRECTORS'  REGULAR  MEETING. 


(See  Minutes  "  Regular  Meeting  of  Directors,"  Form  99.) 

§  121.  Preliminaries. 

The  secretary's  corporate  calendar  (see  §  155;  also  Forms 
155,  156)  will  indicate  the  proper  date  when  notices  of  regular 
meetings  of  the  directors  must  be  sent  out.  (See  Form  90.) 
The  number  of  days  before  such  meeting  that  such  notices 
are  to  be  sent  out  is  fixed  by  the  by-laws.  After  these  notices 
are  duly  mailed,  it  only  remains  for  the  secretary  to  prepare 
a  copy  of  the  order  of  business  for  the  use  of  the  president. 
(See  Form  63.)  It  will  facilitate  the  proceedings,  however,  if 
the  secretary  prepares  in  advance  any  motions  or  resolutions 
that  are  likely  to  be  needed  at  the  meeting. 

§  122.  Opening  the  Meeting. 

At  the  appointed  time  the  president,  or,  in  his  absence,  the 
vice-president,  would  call  the  meeting  to  order.  (See  §  57.) 
Should  both  these  officials  be  absent,  then  the  next  ranking 
officer,  if  a  member  of  the  board,  would  officiate.  Should  this 
duty  devolve  upon  the  secretary,  it  would  be  advisable  for  him 
to  call  the  meeting  to  order  and  then  request  some  other  mem- 
ber of  the  board  to  act  as  president.  With  the  consent,  or  in  the 
absence  of  any  expressed  objection  from  those  present,  this 
would  be  entirely  proper  and  would  leave  the  secretary  free 
to  attend  to  his  own  proper  duties,  which  he  could  perform 
much  better  than  could  any  temporary  appointee.  Or,  on 
request  of  the  secretary,  a  motion  might  be  made  that  some 

114 


DIRECTORS'    REGULAR    MEETING.  115 

member  of  the  board  named  in  the  motion  act  as  temporary 
president  in  order  to  leave  the  secretary  free  to  attend  to  his 
own  duties.  Such  motion,  if  seconded,  would  be  put  to  the 
meeting  by  the  secretary,  and,  if  passed,  the  member  named 
would  at  once  take  the  chair,  and  the  secretary  would  return 
to  his  own  duties. 

Should  no  officer  be  present,  or  should  none  of  the  officers 
present  be  members  of  the  board,  it  would  be  proper  for  any 
member  of  the  board  to  call  the  meeting  to  order,  and,  a  motion 
being  made  and  seconded  that  some  one  present  act  as  chair- 
man of  the  meeting,  to  put  the  motion,  and  then  yield  the  chair 
to  the  party  so  appointed. 

As  soon  as  the  meeting  is  called  to  order,  the  secretary 
should  see  that  the  president  is  provided  with  a  copy  of  the 
order  of  business.  No  formal  roll-call  is  necessary,  but  the 
secretary  should  note  the  names  of  those  present  so  that,  pro- 
vided a  quorum  were  present,  the  records  would  show  that 
fact.  Should  there  be  no  quorum,  the  meeting  could  transact 
no  business,  but  must  either  adjourn  sine  die,  or  adjourn  over 
to  another  day,  when  possibly  a  quorum  might  be  obtained. 
When  such  adjourned  meeting  is  again  assembled,  any  business 
may  be  transacted  thereat  that  might  have  been  acted  upon  at 
the  original  meeting.  (See  §  128.) 

§  123.  Proof  of  Notice. 

Formal  submission  of  proof  of  notice  of  a  directors'  meeting 
is  not  necessary  unless  called  for  by  the  presiding  officer  or 
some  member  of  the  board.  For  his  own  protection,  however, 
and  as  evidence  in  case  of  any  future  dispute  in  regard  to  the 
matter,  the  secretary  should  preserve  a  copy  of  the  notice  as 
sent  out  and  endorse  upon  it  the  fact  that  it  was  duly  mailed, 
on  the  date  given  thereon,  to  the  last  known  address  of  each 
member  of  the  board.  This  endorsed  notice  should  be  filed  for 
possible  future  reference.  Also  the  fact  that  due  legal  notice 
of  the  meeting  was  given  should  be  noted  in  the  minutes. 


116  CORPORATE    MANAGEMENT. 

The  appropriate  entries  for  the  minutes  will  be  found  in 
Form  99. 

§  124.  Reading  of  Minutes. 

As  a  .matter  of  due  parliamentary  procedure,  any  unap- 
proved  minutes  of  the  preceding  directors'  meeting,  or  meet- 
ings, should  be  read  and  disposed  of  before  any  other  business 
is  considered.  Sometimes,  however,  when  time  is  pressing, 
the  president  will  direct  that  the  reading  of  the  minutes  be 
dispensed  with,  or  a  formal  motion  will  be  made  that  the  read- 
ing of  the  minutes  be  omitted.  Whatever  action  is  taken  should 
appear  in  the  minutes  of  the  meeting.  It  is  always  preferable 
that  the  minutes  of  the  previous  meeting  should  be  read  and 
disposed  of  at  the  next  following  meeting,  and  the  secretary 
should  endeavor  to  have  this  done.  When  the  minutes  are 
once  read  and  approved,  the  secretary  is  relieved  from  personal 
responsibility  as  to  their  correctness. 

After  the  reading  of  any  minutes,  corrections  are  in  order. 
If  any  are  suggested  and  no  one  objects  thereto,  the  president 
will  instruct  the  secretary  to  make  such  corrections.  If  objec- 
tions are  offered  to  any  suggested  correction,  the  matter  is 
decided  by  vote  of  the  board.  If  there  are  no  corrections,  or 
after  any  corrections  have  been  made,  the  minutes  may  be 
approved  by  formal  motion,  though  usually  the  president  will 
merely  say,  "  If  there  is  no  objection,  the  minutes  as  read  (or 
"  as  corrected  ")  will  stand  approved,"  and  no  other  action  is 
necessary.  (See  §140.) 

It  should  be  noted  that  the  minutes  of  stockholders'  meet- 
ings would  not  be  read  at  directors'  meetings,  unless  by  special 
request  or  motion;  nor,  if  read,  could  they  be  approved.  As 
far  as  minutes  are  concerned,  each  body  is  entirely  separate 
and  distinct,  and,  except  for  purposes  of  information,  have 
nothing  to  do  with  the  other's  minutes.  Sometimes  separate 
books  are  provided  for  the  minutes  of  the  stockholders'  and  the 
directors'  meetings,  though  the  general  practice  is  to  have  but 
the  one  book,  in  which  all  minutes  are  entered. 


DIRECTORS'    REGULAR    MEETING.  117 

§  125.  Reports. 

After  disposal  of  the  minutes,  the  president  should  call  for 
any  reports;  from  officers  first,  and  then  from  committees,  if 
any  exist.  When  a  report  is  made,  it  should  be  disposed  of  by 
motion,  but  if  this  is  not  done  the  secretary  should  inquire  of 
the  president  as  to  the  disposition  of  the  report.  If  there  were 
no  objections  thereto,  the  president  would  direct  that  the  report 
be  received  and  filed.  It  is,  however,  more  courteous  toward 
those  making  the  reports  to  receive  and  file  such  reports  by 
formal  motion  than  to  leave  this  to  the  president. 

Verbal  reports  are  often  made  by  officers  when  the  matters 
to  be  reported,  or  the  circumstances  do  not  demand  the  more 
formal  written  report.  In  such  event  the  secretary  should  give 
A  synopsis  of  the  report,  or  the  purport  of  it,  as  near  as  may  be, 
in  the  minutes. 

When  a  report  is  ordered  received  and  filed,  any  matters  of 
special  importance  therein,  or  matters  that  may  be  acted  upon 
later  in  the  meeting,  should  be  noted  in  the  minutes,  the  secre- 
tary using  his  discretion  as  to  what  is  necessary  to  make  the 
minutes  complete  and  intelligible. 

§  126.  Unfinished  Business. 

It  usually  rests  with  the  secretary  to  bring  up  any  matter 
of  business  left  over  from  preceding  meetings  and  needing 
attention.  This  is  one  of  the  important  duties  of  the  secretary 
and  a  matter  that  should  be  looked  after  by  him  with  much 
care. 

§  127.  New  Business. 

New  business  may  be  brought  up  through  the  president, 
who  may  mention  any  makers  requiring  attention  that  have 
come  to  his  notice,  or  such  n^w  business  may  be  introduced  by 
members  of  the  board.  These  latter  usually  present  any  matters 
in  which  they  are  interested,  with  some  explanation  or  state- 
ment, and  then  make  a  motion  in  regard  thereto,  or  move  the 


118  CORPORATE    MANAGEMENT. 

passage  of  some  appropriate  resolution.  Members  should 
always,  when  possible,  reduce  motions  and  resolutions  to 
writing  before  presenting  them,  as  to  do  so  puts  the  whole 
matter  in  much  clearer  shape,  and  makes  the  secretary's  task 
much  easier.  If  motions  and  resolutions  are  not  written  out  in 
advance,  the  secretary  must  get  them  down  in  the  best  shape 
possible.  This  is  perhaps  the  most  difficult  of  the  secretary's 
tasks. 

In  the  absence  of  any  regulations  in  regard  to  the  matter, 
the  president  has  authority  to  require  all  motions  and  resolu- 
tions to  be  reduced  to  writing  before  being  presented  to  the 
meeting.  In  all  matters  of  importance,  or  of  any  complica- 
tion, he  should  insist  upon  this  being  done. 

§  128.  Adjournment. 

When  the  business  of  the  meeting  has  been  finished,  or 
when,  for  any  reason,  the  board  cannot  longer  continue  in 
session,  an  adjournment  should  be  taken,  either  absolutely, 
which  terminates  the  meeting,  or  to  some  future  time.  If  the 
business  of  the  meeting  is  unfinished  and  is  of  importance,  such 
meeting  should  be  adjourned  to  the  next  day  on  which  the 
members  can  be  present. 

A  meeting  adjourned  in  this  manner  is,  on  reassembling, 
the  same  meeting,  and  does  not  require  any  notification  to  the 
members  of  the  board.  If,  however,  the  adjournment  is  over 
some  days,  the  matter  is  likely  to  be  overlooked,  and  it  is 
advisable  that  the  secretary  send  out  an  informal  notice  of  such 
adjourned  meeting.  Also,  if  any  members  of  the  board  were 
absent  from  the  original  meeting,  it  would  be  courteous  as 
well  as  advisable  to  give  them  notice  of  the  adjourned  meeting. 

§  129.  General. 

In  many  corporations  the  regular  meetings  of  the  board 
are  held  at  long  intervals,  or  where  fixed  at  more  frequent 
intervals  are  often  omitted.  This  may  be  because  there  is  little 


DIRECTORS'    REGULAR    MEETING.  119 

business  to  transact,  or  because  the  appointment  of  an  execu- 
tive committee  relieves  the  board  of  the  necessity  of  frequent 
meetings,  or  because  the  corporation  being  a  close  one,  with 
all  those  immediately  concerned  working  together  in  the  busi- 
ness of  the  company,  most  matters  are  settled  as  they  arise  by 
informal  conference.  Usually  under  such  conditions  meet- 
ings are  only  held  when  some  matter  comes  up  requiring  the 
formal  action  of  the  directors. 

There  is  no  valid  objection  under  such  circumstances  to 
the  infrequency  of  directors'  meetings.  It  would,  however, 
be  better  on  all  accounts  in  such  cases  to  make  the  by-laws 
conform  to  the  practice  of  the  directors,  and  arrange  the 
regular  meetings  at  such  distant  intervals  that  they  would 
be  held  and  regularly  carried  through.  Special  meetings 
might  be  called  at  any  time  should  any  immediate  necessity 
arise  for  action  of  the  directors. 


CHAPTER    XIII. 
DIRECTORS'  SPECIAL  MEETING. 


(See  Minutes  "  Directors'  Special  Meeting,"  Form  97.) 

§  130.  Preliminaries. 

The  preliminaries  to  a  special  or  called  meeting  of  the 
board  of  directors  are  the  call  (See  Form  84)  and  the  notice 
(See  Form  89)  to  all  the  members ;  or  the  call  may  be  com- 
bined with  a  waiver  of  notice.  (See  Form  78.)  The  formali- 
ties of  the  call  should  be  prescribed  in  the  by-laws,  and,  when 
the  call  is  properly  drawn,  signed  by  the  president  or  by  the 
requisite  number  of  directors,  and  handed  to  the  secretary, 
the  meeting  is  duly  authorized  and  it  becomes  the  duty  of 
that  official  to  notify  the  members. 

In  all  close  corporations,  and  where  the  members  are 
readily  accessible,  it  is  the  better  plan  to  employ  the  call 
ard  waiver  of  notice.  This  obviates  any  possible  question  as 
to  the  legality  of  the  notice  given  for  any  such  meeting. 

If  all  the  members  of  the  board  of  directors  can  be  gotten 
together,  a  special  meeting  may,  by  unanimous  consent,  be 
held  at  any  time,  and  without  formal  call  and  notice  of  any 
kind.  In  such  event,  the  minutes  should  show  very  clearly 
that  all  of  the  members  were  present,  and  agreed  to  or  par- 
ticipated in  such  meeting.  A  member's  presence  and  partici- 
pation in  any  meeting  would  estop  him  from  any  legal  right 
to  object  to  informalities  of  notice  or  procedure  in  connec- 
tion with  such  meeting.  (See  §  136.) 

120 


DIRECTORS'    SPECIAL    MEETING.  121 

§  131.  Opening  the  Meeting. 

The  president,  or,  in  his  absence,  the  vice-president,  or 
next  officer  in  rank  who  may  be  present,  if  a  member  of  the 
board,  will  call  the  meeting  to  order,  and  the  secretary  will  lay 
the  order  of  business  before  him.  The  proper  entries  in  the 
minutes  will  be  found  in  Form  97.  The  secretary  will  note  the 
names  of  those  present,  so  that  the  record  of  the  meeting  will 
show  a  quorum  present,  if  such  is  the  case,  and  the  members 
composing  such  quorum. 

§  132.  Proof  of  Call  and  Notice. 

In  a  special  meeting  it  is  most  essential  that  the  minutes 
shall  show  that  the  meeting  was  properly  called  and  that  all 
the  members  were  notified.  The  call  and  notice,  or  the  call 
and  waiver  of  notice,  should  be  entered  in  full.  Without  the 
due  observance  of  these  preliminaries,  unless  legalized  by  the 
presence  and  participation  of  all  the  directors  (See  §  136),  no 
legal  meeting  would  be  possible,  and  the  fact  that  the  formali- 
ties relating  to  the  call  and  notice  have  been  duly  observed 
should  be  clearly  shown  by  the  minutes. 

Regular  meetings  are  provided  for  in  the  by-laws,  owe 
their  legality  to  that  fact  and  do  not  depend  upon  calls,  waivers 
or  notices.  Notices  are,  it  is  true,  usually  provided  for  in  the 
by-laws,  but  as  a  matter  of  convenience  for  the  members,  not 
as  a  legal  requirement.  With  a  special  meeting,  however,  the 
due  call  and  the  sufficient  notice  to  each  member  are  the  basis 
of  the  meeting,  and  are  absolutely  essential  to  its  legality. 

§  I33-  Special  Business. 

Minutes  of  previous  meetings  should  not  be  approved  at  a 
special  meeting,  unless  such  action  was  specified  as  one  of  the 
objects  of  the  call.  The  special  business,  as  set  forth  in  the 
call,  should  be  presented  by  the  presiding  officer,  or  he  should 
call  on  the  secretary  or  some  member  to  introduce  it.  If  a 
resignation  or  some  proposition  is  to  be  brought  before  the 


122  CORPORATE    MANAGEMENT. 

meeting,  it  should  be  read  or  presented  first,  and  then  acted 
upon  by  a  properly  phrased  motion  or  resolution.  In  some 
cases  the  special  business  would  be  best  brought  forward  by 
the  introduction  of  a  resolution  embodying  the  proposed  action. 

§  134.  Disposal  of  Special  Business. 

When  a  motion  or  resolution  disposing  of  the  business  for 
which  the  meeting  was  called  has  been  seconded  and  is  before 
the  meeting,  the  matter  is  open  for  discussion,  and  the  pro- 
posed action  is  subject  to  amendment,  reference,  acceptance, 
rejection  or  any  other  parliamentary  disposition.  The  min- 
utes should  show  clearly  what  is  done,  as  well  as  the  final  dis- 
position of  the  matter. 

§  135.  Adjournment. 

If  all  of  the  special  business  mentioned  in  the  call  has  been 
disposed  of,  the  meeting  will  be  adjourned  absolutely.  If, 
however,  it  has  not  been  decisively  terminated  and  more  time 
is  needed,  an  adjournment  may  be  taken  to  the  next  day  or 
to  some  later  day.  Sometimes  an  absolute  or  "sine  die " 
adjournment  is  taken  as  a  convenient  way  of  dismissing  the 
matter.  In  such  case  a  new  meeting  would  have  to  be  called 
if  it  was  desired  to  take  up  the  matter  again. 

§  136.  General 

If  all  the  members  of  the  board  of  directors  are  present  at, 
or  participate  in,  or  agree  to  any  meeting,  no  matter  how  called, 
it  becomes  then  a  "  consent  meeting,"  and  any  business  may 
be  brought  before  it.  In  New  York  this  has  been  enacted 
into  statute  law.  Elsewhere  it  would  be  good  under  the  gen- 
eral principles  of  corporation  law. 

Members  of  the  board  of  directors  cannot,  however,  agree 
to  a  course  of  action  without  meeting.  The  signing  of  a  paper 
by  all  the  directors  authorizing  some  particular  action  has  no 
legal  effect.  The  reason  for  electing  a  board  is  that  they  may 


DIRECTORS'    SPECIAL    MEETING.  128 

meet  together  and  confer,  and,  after  due  consultation,  decide 
upon  the  policy  of  the  company.  It  is  only  as  a  body  that  they 
have  authority,  and  only  as  a  body  in  lawful  meeting  assembled 
that  they  can  act.  Frequently  the  members  of  the  board  will, 
when  a  meeting  is  inconvenient,  as  individuals,  assent  to  some 
action,  or  direct  the  officers  to  take  some  action,  and  agree  to 
ratify  it  at  the  next  meeting.  When  such  action  is  so  ratified 
it  becomes  the  lawful  action  of  the  board;  but  it  derives  its 
legality  entirely  from  the  ratification,  and  in  no  measure  from 
the  previous  irregular  authorization.  The  officers  or  others 
acting  before  ratification  do  so  at  their  own  risk,  and,  in  case 
the  ratification  was  not  made,  would  be  responsible  for  their 
action. 


CHAPTER    XIV. 
MINUTES. 

§  137.  The  Minute  Book. 

The  minute  book  of  a  corporation,  properly  kept  by  the 
secretary,  is  legal  evidence  of  the  proceedings  at  the  meetings 
of  stockholders  and  of  directors.  This  book  should  be  retained 
in  the  custody  of  the  secretary,  and  all  entries  should  be  made 
by  him.  Any  director  has  the  right  to  inspect  the  minutes  at 
any  suitable  time.  A  stockholder,  as  a  general  rule,  does  not 
have  this  right 

The  minute  book  itself  is  usually  a  blank  book  of  the  style 
termed  "  Record  "  by  stationers.  It  may  be  had  at  any  price, 
from  the  plainly  bound  book  at  fifty  cents  or  less  up  to  elab- 
orately bound  and  specially  ruled  books  costing  many  dollars. 
In  the  simplest  form  it  is  a  blank  book  of  convenient  size,  ruled 
for  writing,  and  usually  with  a  single  or  double  vertical  red 
line  setting  off  the  left  hand  margin.  For  the  usual  small 
corporation,  a  book  containing  one  hundred  pages  would  be 
ample.  A  book  8^2  by  13  inches  will  be  found  convenient. 
It  should  consist  of  a  good  quality  of  ledger  paper  and  be  sub- 
stantially bound. 

For  the  form  of  entries  see  Forms  of  Minutes,  91  to  99. 
Marginal  entries,  where  necessary,  are  frequently  made  in  red 
ink,  and  the  first  words  of  the  text  and  specially  important 
statements  are  sometimes  underlined  in  red. 

Minutes  are  not  infrequently  written  with  the  typewriter 
on  thin  paper  and  then  pasted  into  the  minute  book.  The 
loose  leaf  minute  book,  in  which  the  pages  may  be  written 

124 


MINUTES.  125 

with  the  ordinary  typewriter  and  then  inserted,  is  also  used 
to  some  extent.  These  arrangements  are,  however,  open  to 
objections,  as  substitutions  and  alterations  are  easy.  The 
minutes  of  a  company,  when  matters  of  importance  are  consid- 
ered, are  better  kept  as  books  of  account  are  kept;  written  with 
pen  and  ink,  or  with  a  book  typewriter,  and  with  the  entries 
succeeding  each  other  in  such  manner  that  no  later  additions 
or  insertions  are  possible.  Kept  in  this  manner  and  properly 
authenticated,  the  minute  book  is  competent  evidence  in  case 
of  litigation  as  to  the  proceedings  at  the  company's  meetings; 
otherwise  its  testimony  might  be  open  to  question. 

§  138.  Contents  of  Minute  Book. 

The  first  pages  of  the  minute  book  should  contain  a  copy 
of  the  charter  or  certificate  of  incorporation  of  the  company. 
This  may  be  the  certified  copy  received  from  the  Secretary  of 
State,  bound  or  pasted  into  the  minute  book ;  or,  equally  good, 
a  careful  and  legible  copy  made  by  the  secretary  directly  on 
the  first  pages.  Following  the  charter  should  come  the  by- 
laws of  the  company,  likewise  carefully  and  legibly  copied, 
and  beginning  at  the  top  of  the  first  page  after  the  charter. 
The  by-laws  should  be  followed  by  a  certificate  signed  by  the 
secretary  and  stating  that,  as  written,  the  foregoing  by-laws 
are  a  true  and  correct  copy  of  the  by-laws  adopted  at  the 
meeting  of  the  stockholders  of'  the  company,  held  at  such  a 
time  and  place.  (See  §  39;  also  Form  128.) 

Two  or  three  pages  next  succeeding  the  by-laws  should 
be  left  blank  for  the  entry  of  any  amendments.  Then  should 
follow  the  minutes  of  the  first  meeting  of  stockholders,  then 
the  proceedings  of  the  first  meeting  of  directors,  and  thereafter 
the  minutes  of  stockholders'  and  directors'  meetings  in  due 
sequence  as  held.  Each  meeting  should  begin  at  the  top  of  its 
proper  page,  and  no  blank  pages  should  be  left  between  the 
records  of  the  different  meetings. 

In  large  corporations  there  is  some  advantage  in  having 
separate  minute  books  for  the  proceedings  of  the  stockholders' 


126  CORPORATE    MANAGEMENT. 

and  directors'  meetings.  There  is,  however,  nq  good  reason 
for  so  doing  in  the  case  of  the  smaller  corporations,  and  usually 
the  minutes  of  all  meetings  are  written  in  the  same  book,  in 
order  of  date,  without  any  attempt  at  separation  of  the  minutes 
of  the  two  bodies  beyond  the  distinctive  headings  of  such 
minutes. 

§  139.  Forms  for  Minutes. 

The  minutes  given  in  the  Fourth  Part  of  this  work  are  in 
conventional  form.  There  is,  however,  no  set  form  nor  abso- 
lute rule  as  to  how  the  minutes  of  a  meeting  shall  be  recorded, 
and  any  clear  statement  in  good  English  is  legally  sufficient. 
Usually,  however,  the  conventional  arrangement  will  be  found 
clearest  and  most  concise,  and  should  be  followed. 

It  may  be  noted  that  a  verbatim  report  of  the  proceedings 
at  any  ordinary  meeting  is  the  last  thing  desired.  A  record 
of  what  is  done,  not  of  what  is  said,  is  the  desideratum,  and 
such  record  should  be  as  concise  and  accurate  as  possible. 

During  the  progress  of  a  meeting  many  letters,  reports, 
contracts  and  other  instruments  are  likely  to  be  presented.  In 
some  cases  the  secretary  is  instructed  to  enter  certain  of  these 
upon  the  minutes,  but  in  other  cases  it  rests  in  his  discretion 
whether  these  documents  be  entered  in  full,  in  part,  or  be 
entirely  omitted.  Generally  it  is  sufficient  if  they  be  filed  and 
preserved,  and  only  such  reference  made  to  them  in  the  minutes 
as  will  suffice  to  identify  them,  or  explain  their  connection 
with  the  action  taken.  If,  however,  the  matters  to  which  they 
relate  are  important,  they  might  well  be  entered  in  full,  or,  as 
it  is  phrased,  "  spread  upon  the  minutes."  When  this  is  done 
the  minutes  constitute  a  complete  record  in  themselves,  which 
is  sometimes  a  matter  of  much  importance. 

The  minutes  should  be  written  up  in  permanent  form  as 
soon  after  the  meeting  as  possible,  and  while  its  events  are 
fresh  in  the  secretary's  mind.  If  he  is  in  doubt  about  any  part 
of  the  proceedings,  he  may  ask  assistance  from  the  president 
or  members  present  at  such  meeting.  He,  however,  must  take 


MINUTES.  127 

the  final  responsibility  of  making  the  authoritative  record 
which  he  signs. 

The  secretary  should  spare  no  pains  to  secure  accuracy  in 
the  minutes,  for  they  are  the  legal  evidence  of  the  action  taken 
at  the  meeting  recorded,  and  the  authority  for  any  action  of 
the  officers  required  thereby;  and  they  will  probably  be  referred 
to  and  acted  upon  before  the  formal  approval  of  the  stock- 
holders relieves  the  secretary  from  further  responsibility. 

As  soon  as  the  minutes  are  written  up,  they  should  be 
signed  by  the  secretary  with  his  official  signature ;  that  is,  with 
his  name  followed  by  his  title,  "  Secretary."  It  is  customary 
to  have  the  presiding  officer  also  sign  the  minutes  officially, 
and  this,  while  not  actually  essential,  is  advantageous,  acting 
as  a  check  upon  the  secretary's  work,  and  the  presiding  officer 
thereby  assuming  with  the  secretary  the  responsibility  for  the 
correctness  of  the  minutes. 

The  minutes  of  a  stockholders'  meeting  will  probably  not 
be  passed  upon  until  the  following  annual  meeting,  when  they 
will  be  read,  and,  if  no  objections  are  offered,  approved.  If 
approved,  no  record  need  be  made  save  the  statement  in  the 
minutes  of  the  last  held  meeting  that  the  minutes  of  the  pre- 
vious meeting  were  read  and  approved.  Sometimes,  as  a  mat- 
ter of  convenience,  the  secretary  will  endorse  at  the  bottom 
of  the  minutes,  after  approval,  "  Read  and  approved  at  the 
Annual  Meeting,  January  24th,  1903,"  or  whatever  the  date 
may  be.  (See  §  106.) 

§  140.  Amendment  of  Minutes. 

Should  the  minutes  as  read  by  the  secretary  be  objected 
to,  but  such  objection  be  on  some  immaterial  or  obvious  point, 
such  as  the  initial  of  a  name,  or  a  wrong  numeral  in  the  date, 
or  a  statement  that  the  minutes  were  of  a  directors'  instead 
of  a  stockholders'  meeting,  the  presiding  officer  would  simply 
direct  that  the  proper  correction  be  made,  and  the  secretary 
would  make  the  necessary  changes  without  formality. 


128  CORPORATE    MANAGEMENT. 

Should  the  error  be  more  serious,  the  correction  might  be 
ordered  by  formal  motion,  or,  in  the  absence  of  objection  on 
the  part  of  those  present,  might  still  be  directed  by  the  presi- 
dent or  chairman.  In  such  event,  the  minutes  of  the  meeting 
then  in  session  should  show  exactly  what  correction  was 
directed  and  in  what  minutes.  In  the  corrected  minutes  the 
correction  should  appear  in  red  ink,  and  a  marginal  reference 
should  give  the  date  of  the  meeting  at  which  such  correction 
was  directed.  A  single  red  ink  line  might  be  drawn  through 
any  part  ordered  stricken  out,  and  any  correction  interlined, 
but  no  erasure  should  be  made  in  any  case,  as  the  corrected 
minutes  should  show  both  the  error  and  the  correction. 

Sometimes  it  happens  that  when  the  minutes  are  read  there 
are  those  present  who,  having  kept  no  record  of  the  previous 
meeting,  really  forget  what  was  done  and  imagine  that  the 
secretary  has  made  grave  errors  in  the  record.  These  mem- 
bers may  be  entirely  wrong  in  their  recollection  of  what  hap- 
pened; or,  as  sometimes  occurs,  the  secretary  actually  may 
have  made  serious  misstatements  in  his  records.  In  either 
case,  any  objecting  stockholder  (or  director,  if  at  a  board 
meeting)  may  move  that  certain  portions  of  the  minutes  be 
stricken  out  and  other  matter  inserted.  Whether  right  or 
wrong,  if  a  majority  of  those  present  at  the  meeting  vote  with 
the  objecting  party,  the  motion  is  passed  and  the  secretary 
must  carry  it  into  effect.  In  such  case  that  officer  would  draw 
red  lines  through  the  part  ordered  stricken  out  and  interline 
in  red  ink  the  matter  ordered  inserted.  In  the  margin  he 
would  then  make  an  entry  referring  to  the  date  and  meeting 
at  which  such  change  was  ordered.  This  then  shows  the 
whole  matter :  that  the  record  was  made  in  one  way,  and  was, 
at  a  later  date,  ordered  changed.  The  minutes  of  the  meeting 
at  which  such  change  was  ordered  would  also  give  a  complete 
statement  of  the  matter. 

§  141.  Taking  Proceedings. 

If  the  presiding  officer  of  the  meeting  will  insist  that 
motions  and  resolutions  be  reduced  to  writing  before  being 


MINUTES  129 

considered,  a  few  helpful  notes  made  in  proper  sequence  will 
enable  the  secretary  to  write  up  an  accurate  record  of  such 
meeting  with  but  little  difficulty.  If  a  programme  of  the 
meeting  has  been  made  out  in  advance,  with  convenient  spaces 
between  the  items,  very  few  notes  will  suffice  to  preserve  a 
record  of  everything  that  happens.  All  papers  presented  to 
or  used  at  meetings  should  be  filed  for  future  reference.  (See 

§  I39-) 

It  should  be  remembered  that  minutes  are  not  to  be  encum- 
bered with  things  that  are  said,  but  are  intended  to  be  a  record 
only  of  those  that  are  actually  done.  A  motion  or  resolution 
that  is  put  before  the  meeting  should  be  noted,  and  its  disposi- 
tion, whether  passed  or  rejected,  should  be  recorded;  but, 
speaking  generally,  the  debate  and  discussion  should  not  be 
set  down. 

It  sometimes  happens  that  a  stockholder  or  member,  oppos- 
ing some  proposed  action,  wishes  his  objections  or  protest 
recorded  in  the  minutes.  If  his  objections  are  pertinent  and 
not  too  lengthy,  this  should  usually  be  done;  but  the  presiding 
officer,  not  the  secretary,  would  decide  the  matter,  and  the 
secretary  should  be  guided  by  the  president's  directions.  The 
objecting  member  will  sometimes  file  his  objections  or  protests 
in  writing,  and  in  such  case  the  document  should  be  received 
and  filed,  and  the  fact  that  it  was  received  and  filed  would  be 
noted  in  the  minutes.  In  some  cases  it  is  necessary  for  a 
member  of  the  board  to  have  his  dissent  noted  in  order  to 
avoid  liability.  In  such  case  he  has  the  right  to  demand  its 
entry  upon  the  minutes. 

§  142.  Motions  and  Resolutions. 

By  means  of  motions  and  resolutions  the  meeting  expresses 
its  will.  The  two  are  of  the  same  force,  though  a  resolution 
is  usually  more  formally  drawn  up  and  is  employed  for  all  the 
more  important  matters.  Either  a  motion  or  resolution,  unless 
merely  a  routine  matter,  such  as  to  adjourn,  lay  on  the  table, 
etc.,  should  be  reduced  to  writing  by  the  member  by  whom  it 
9 


130  CORPORATE     MANAGEMENT. 

is  introduced.  The  matter  is  apt  to  be  put  in  much  better  shape 
under  these  circumstances  than  when  merely  oral,  and  error  on 
the  part  of  the  secretary  is  prevented.  When  possible,  in  mat- 
ters of  any  importance,  the  secretary  should  note  who  makes 
a  resolution  or  motion,  and  who  seconds  it  when  made.  If, 
however,  the  presiding  officer  decides  that  a  motion  or  resolu- 
tion is  properly  before  the  meeting,  and  puts  it  to  the  vote,  the 
fact  that  the  mover  and  seconder  are  not  known  does  not  affect 
the  validity  of  the  action  taken  thereon,  or  the  force  of  the 
action,  if  favorable. 

Where  the  secretary  knows  that  certain  matters  are  coming 
up  for  consideration,  he  can  often  facilitate  the  proceedings 
materially  by  preparing  the  necessary  motions  or  resolutions 
in  advance.  (See  Chaps.  XXIII,  XXIV.) 

§  143.  Outline  Minutes. 

For  the  first  meeting,  or  the  annual  meeting,  or  any  other 
meeting  where  the  action  is  largely  formal  or  predetermined, 
programmes  and  outline  minutes  may  be  prepared  in  advance, 
and  will  be  found  not  only  to  facilitate  the  proceedings,  but  to 
assist  the  secretary  materially  in  securing  a  full,  accurate 
record  of  the  same.  (  See  Form  66. )  Blanks  are  left  for  the 
names  and  details,  which  may  be  filled  in  as  the  meeting  pro- 
gresses. Anything  appertaining  to  a  meeting  that  can  be 
done  in  advance  renders  the  work  of  the  secretary  at  the  time 
of  the  meeting  easier  and  likewise  more  accurate. 

§  144.  "  Cut  and  Dried  Minutes." 

Under  modern  corporate  procedure,  many  formal  meetings 
have  to  be  held  in  localities  distant  from  the  residence  of  the 
parties  in  interest.  Of  this  character  are  the  annual  meetings 
of  most  "  non-resident  "  New  Jersey  corporations,  which  must 
be  held  in  the  New  Jersey  office  of  the  company.  Also  there 
are  many  corporations  in  which  the  whole,  or  the  greater  part 
of  the  stock  is  held  by  combinations,  and  the  corporations 


MINUTES.  131 

themselves  only  hold  such  meetings  as  are  essential  to  maintain 
their  legal  existence.  In  these  and  many  other  cases,  the  only 
necessity  for  meetings  is  to  give  the  proper  legal  expression  to 
matters  that  are  already  determined;  and  it  is  possible  to  write 
out  the  entire  minutes  in  advance. 

Under  such  circumstances  the  proceedings  of  the  meeting 
are  simple.  A  controlling  interest,  usually  in  the  shape  of 
proxies,  is  sent  or  taken  to  the  place  of  meeting ;  if  the  regular 
officers  are  not  present,  or  are  not  authorized  to  act,  officials 
for  the  meeting  are  appointed  at  the  time,  the  prepared  minutes 
are  read  over  and  agreed  to,  the  meeting  is  adjourned,  the 
accepted  minutes  returned  to  the  secretary,  who  copies  them 
into  his  book  of  minutes,  and  the  whole  matter  is  done.  Such 
a  "  cut  and  dried  "  meeting  is  not  always  pleasing  to  minority 
stockholders,  but  the  recording  of  its  proceedings  is  a  very 
simple  matter  for  the  secretary. 


CHAPTER  XV. 
CORPORATION  BOOKS. 


§  145.  Treasurer's  Books. 

The  term  "  corporation  books  "  is  usually  intended  to  indi- 
cate those  books,  peculiar  to  a  corporation,  which  are  kept 
by  the  secretary.  The  treasurer's  books,  on  the  other  hand, 
are  simply  the  books  in  which  are  kept  the  corporation 
accounts,  and  are  the  same  as  in  any  other  business,  with  the 
possible  addition  in  large  corporations  of  a  dividend  book  or 
dividend  ledger.  There  is  nothing  peculiar  in  the  method  of 
keeping  the  treasurer's  books.  Any  standard  work  on  book- 
keeping will  give  specific  directions  for  changing  the  books  of 
a  partnership  into  corporation  books,  for  keeping  these  latter 
thereafter,  and  for  the  apportioning  of  dividends.  The  num- 
ber, character  and  complexity  of  the  books  and  accounts  kept 
by  the  treasurer  of  a  corporation  depends  upon  the  nature  of 
the  business,  and  would  be  practically  the  same,  whether  the 
business  were  conducted  by  a  firm  or  a  corporation. 

§  146.  Secretary's  Books. 

The  books  peculiar  to  a  corporation  the  keeping  of  which 
falls  upon  the  secretary,  are  few  or  more,  according  to  the 
needs  of  the  company  and  the  requirements  of  the  law  of  the 
state  of  incorporation,  or  of  the  state  of  domicile.  They  are 
usually  the  minute  book,  stock  certificate  book,  transfer  book, 
stock  book  and  stock  ledger. 

The  minute  book  has  already  been  considered  in  the  pre- 
ceding chapter.  The  other  books  mentioned  will  now  be 
treated  of  in  the  order  given. 

132 


CORPORATION    BOOKS.  183 

§  147.  Stock  Certificate  Book. 

The  stock  certificate  book  is  usually  made  up  of  from  fifty 
to  five  hundred  stock  certificates  in  blank,  ready  to  be  filled 
out  for  issue,  which,  in  serial  order  and  with  their  correspond- 
ing stubs,  are  bound  in  book  form.  (§  43.)  These  certifi- 
cates are  printed,  lithographed  or  engraved,  on  a  durable  paper, 
and  are  usually  much  adorned  with  more  or  less  artistic  orna- 
mentation. On  the  left  of  each  certificate  is  the  stub  on  which, 
at  the  time  the  certificate  is  issued,  are  noted  all  the  important 
facts  in  regard  to  its  issue.  The  stub  is  usually  separated  from 
its  certificate  by  perforations,  so  that  when  the  certificate  is 
filled  out  for  issue  it  may  be  readily  detached,  leaving  the  stub 
in  the  book  as  the  secretary's  memorandum  of  the  issued  cer- 
tificate. (See  Forms  in  Chap.  XIX.) 

The  stock  certificate  book  is  usually  prepared  at  the  time  of 
the  organization  of  the  company,  or  sometimes  even  before, 
so  that  as  soon  as  the  issue  of  stock  is  authorized  there  may 
be  no  delay  on  account  of  the  absence  of  certificates.  The 
board  of  directors  have  power  to  prescribe  the  form  of  stock 
certificates  and  to  authorize  their  issue.  In  a  very  small  or  a 
"  close "  corporation,  fifty  to  one  hundred  certificates  are 
usually  amply  sufficient  for  the  needs  of  the  company.  In  the 
larger  corporations,  or  in  smaller  corporations  where  the  stock 
is  active,  one  or  more  larger  books  are  usually  prepared,  each 
containing  up  to  500  shares.  For  a  very  active  stock  a  num- 
ber of  volumes  of  this  size  are  frequently  required.  In  such 
case  the  serial  numbers  run  up  regularly  from  I  to  5°°  m  the 
first  volume;  501  to  1,000  in  the  second;  1,001  to  1,500  in  the 
third,  and  so  on.  The  binding  of  the  stock  certificate  book 
should  be  durable  and  lasting. 

Preferred  stock,  is  issued  by  a  corporation,  is  usually  bound 
in  a  separate  volume,  though  if  only  a  few  certificates  are 
required  it  is  sometimes  bound  up  in  the  same  book  as  the 
common  stock,  but  as  a  separate  division  of  such  stock  certifi- 
cate book.  The  numbering  of  preferred  stock  is  also  entirely 
separate  and  distinct  from  that  of  the  common  stock. 


184  CORPORATE  MANAGEMENT. 

In  case  a  new  corporation  desires  to  issue  elaborately 
engraved  or  lithographed  certificates,  and  its  officials  do  not 
wish  to  delay  the  issue  of  stock  until  such  certificate  are  pre- 
pared, cheap  temporary  receipts  or  certificates  are  issued, 
exchangeable  for  the  permanent  certificates  so  soon  as  these 
latter  are  ready  for  delivery.  (See  Form  8.)  Sometimes  the 
delivery  of  the  permanent  certificates  is  deferred  for  a  consid- 
rable  time  on  account  of  the  necessary  delay  in  preparation, 
or  to  temporarily  save  expense,  or  for  some  other  reason,  and 
in  such  event  temporary  certificates  are  issued  and  used  until 
the  permanent  certificates  are  ready.  The  form  of  these  tem- 
porary certificates  is  the  same  as  that  of  the  permanent  certifi- 
cates, but  they  are  usually  marked  "  Temporary  Certifi- 
cates," and  the  statement  is  printed  upon  them  that  they  will 
be  exchanged  for  permanent  certificates  as  soon  as  these  latter 
are  ready  to  be  delivered. 

When  the  issue  of  stock  of  a  new  corporation  is  directed, 
the  secretary  fills  out  and  seals  each  of  the  certificates  to  be 
issued.  At  the  same  time  he  fills  out  the  stub  of  each  certifi- 
cate, so  that  such  stub  contains  a  complete  record  of  the  issued 
certificate.  The  secretary  or  the  treasurer,  as  provided  by  the 
by-laws,  signs  the  certificate;  the  president  also  affixes  his  sig- 
nature, and  the  certificate  is  ready  for  issue.  On  the  stub 
of  such  original  stock,  under  the  heading,  "  Issued  against 
surrendered  Certificate  No. ,"  should  be  entered  the  state- 
ment, "  Original  Issue."  If  such  stock  is  issued  for  property 
and  is  full  paid,  to  this  entry  might  be  added  "  Full  paid  for 
property."  (See  Form  14.) 

On  the  back  of  each  certificate  of  stock  is  printed  a  blank 
form  of  assignment  and  power  of  attorney.  (See  Form  17.) 
When  the  stock  represented  by  a  certificate  is  to  be  transferred, 
the  owner  usually  merely  signs  this  form  and  has  his  signature 
witnessed  by  any  competent  person,  leaving  all  the  blanks  in 
the  body  of  the  assignment  to  be  filled  in  later.  This  is  called 
an  assignment  in  blank.  In  this  condition  the  certificate  may 


CORPORATION    BOOKS.  136 

pass  from  hand  to  hand  and  be  sold  any  number  of  times  with- 
out change  or  addition  to  the  assignment.  (See  §  44.) 

Stock  so  assigned  still  stands  on  the  books  of  the  company 
in  the  original  owner's  name,  and  this  original  owner  is  still 
the  stockholder  of  record  and  has  the  legal  right  to  vote  and 
draw  dividends,  though  his  stock  may  have  been  sold  months 
before.  When,  however,  some  holder  of  the  certificate  wishes 
to  perfect  his  title  and  make  himself  a  holder  of  record,  he  fills 
in  his  own  name  as  assignee  and  surrenders  the  certificate  to 
the  secretary  or  transfer  agent  for  transfer.  If  the  signature 
to  the  assignment  is  all  right,  and  there  are  no  reasons  for  sus- 
pecting any  irregularity,  the  transfer  is  made  as  a  matter  of 
course.  The  secretary  or  transfer  agent  writes  his  own  name 
in  the  blank  left  for  the  name  of  the  attorney  in  the  assignment, 
records  the  transfer  upon  the  proper  company  books,  and  issues 
a  new  certificate  in  the  name  of  the  assignee.  Before  deliver- 
ing the  new  certificate  the  secretary  should  require  its  owner 
to  sign  the  receipt  therefor  on  the  stub. 

Frequently  the  owner  of  stock  will  sell  a  portion  of  the 
stock  represented  by  a  certificate,  and,  in  such  case,  the  assign- 
ment on  the  back  of  the  certificate  will  be  filled  out  only  for  the 
number  of  shares  transferred  to  the  newcomer.  For  instance, 
if  a  stockholder  were  possessed  of  one  hundred  shares  of  the 
company  stock,  all  included  in  a  single  one-hundred-share  cer- 
tificate, and  wished  to  sell  twenty  shares  out  of  his  hundred, 
he  would  fill  out  the  assignment  for  twenty  shares  only. 

In  such  case  the  owner  of  the  hundred  shares  would  him- 
self probably  bring  or  send  in  his  certificate  to  the  secretary 
and  instruct  him  to  make  out  two  new  certificates,  the  one  for 
twenty  shares  in  the  name  of  the  new  owner,  the  other  for 
eighty  shares  in  his  own  name.  The  secretary  would  then 
cancel  the  old  certificate,  issue  the  two  new  certificates  in 
accordance  with  the  directions,  and  deliver  both,  unless  he  had 
express  instructions  from  the  original  owner  to  the  contrary, 
to  this  original  owner,  who  would  then  make  the  delivery  of 
the  twenty-share  certificate  at  his  convenience. 


186  CORPORATE   MANAGEMENT. 

Another  and  better  method,  whenever  precaution  is  desira- 
ble, is  for  the  original  owner  to  take  out  both  certificates  in 
his  own  name  and  then  assign  the  twenty-share  certificate  to 
the  new  owner,  leaving  this  latter  to  bring  in  the  assigned 
certificate  and  have  a  new  certificate  issued  in  his  own  name. 
In  this  case,  should  the  sale  fail  of  consummation,  the  original 
owner  would  still  have  his  certificate  made  out  in  his  own 
name,  whereas  had  it  been  made  out  at  once  to  the  supposed 
purchaser  it  would  be  in  the  name  of  this  expected  purchaser, 
and,  unless  the  real  owner  could  procure  the  assignment  of  this 
other  party  as  a  matter  of  courtesy,  he  might  have  much  trouble 
in  getting  the  certificate  back  into  his  own  name. 

The  secretary  or  officers  of  a  corporation  cannot  refuse  to 
make  a  transfer  of  stock  where  all  proper  requirements  have 
been  fulfilled;  but  if  there  is  any  doubt  as  to  the  authenticity 
or  correctness  of  the  assignment,  or  as  to  the  title  of  the  party 
presenting  the  certificate,  or  as  to  any  other  material  matter, 
the  secretary  has  the  right  to  delay  the  transfer  for  a  reason- 
able time  in  order  to  communicate  with  the  former  holder  or 
take  such  other  steps  as  he  may  deem  expedient.  If  the  party 
demanding  the  transfer  is  a  stranger,  the  secretary  may  require 
identification,  or,  if  there  are  reasonable  grounds  for  doubt  as 
to  the  real  ownership  of  the  certificate,  may  require  satisfactory 
evidence  thereof.  If,  after  due  investigation,  there  still 
remains  doubt  as  to  the  propriety  of  the  transfer  or  the  owner- 
ship of  the  certificate,  or  if  there  be  conflicting  claims,  the 
secretary  may  properly  decline  to  act  until  instructed  by  the 
board  of  directors,  and  the  board  of  directors,  if  in  doubt,  may 
decide  to  take  no  action  until  the  matter  has  been  settled  by 
litigation. 

When  a  transfer  has  been  made  and  a  new  certificate  issued, 
the  surrendered  certificate  should  be  canceled  by  cutting, 
punching  or  scratching  out  the  signatures,  and  by  writing  or 
stamping  across  the  certificate  in  red  ink  the  word  "  Canceled." 
This  is  done  to  prevent  the  certificate  from  being  used  for 
fraudulent  purposes  in  case  it  were  stolen  or  came  otherwise 


CORPORATION    BOOKS.  137 

into  the  hands  of  improper  parties.  After  cancellation,  the 
certificate  is  gummed  to  the  stub  from  which  it  was  originally 
taken,  the  proper  entries  are  made  upon  the  stub  (See  Form 
13),  and,  as  far  as  that  certificate  is  concerned,  the  matter  is 
closed.  A  surrendered  certificate  should  never  be  reissued  or 
again  put  in  circulation,  under  any  circumstances. 

In  corporations  where  the  secretary  receives  no  regular 
salary,  or  in  cases  where  there  are  many  transfers  of  stock,  the 
secretary  may  be  authorized  by  the  board  of  directors  to  charge 
a  small  fee  for  transfers,  usually  varying  from  ten  to  twenty- 
five  cents  for  each  certificate  issued.  This  is  sometimes  a  very 
convenient  requirement,  compensating  the  secretary  for  the 
time  and  labor  involved,  and  tending  to  restrain  numerous 
small  or  unnecessary  transfers.  (See  §§  43,  44.) 

§  148.  Transfer  Book. 

The  transfer  book  is  composed  of  a  series  of  blank  trans- 
fers or  assignments  bound  up  together.  The  general  form 
of  these  transfers  may  be  seen  by  reference  to  Form  149. 
They  are  intended  to  be  filled  out  and  signed  by  the  owner  of 
stock,  or  his  duly  authorized  attorney,  whenever  the  actual 
transfer  of  stock  sold  or  otherwise  disposed  of  by  him  is  made 
upon  the  books  of  the  company.  Such  transfers  are  designed 
to  be  the  secretary's  authority  for  the  issuance  of  the  new  cer- 
tificates of  stock  to  the  assignee  in  place  of  the  old,  certificates 
surrendered. 

By  reference  to  the  assignment  on  the  back  of  a  stock  cer- 
tificate (Forms  17  and  18)  it  will  be  seen  that  the  assignment 
of  the  transfer  book  is  merely  a  duplication  of  that  on  the 
stock  certificate,  with  the  power  of  attorney  omitted.  The 
assignment  on  the  certificate  is  a  sufficient  transfer  of  the  stock 
sold,  and,  upon  surrender  of  the  old  certificate,  would  alone 
fully  justify  the  secretary  in  issuing  another  certificate  in  the 
new  name.  For  this  reason  many  of  the  smaller  corporations 
never  keep  a  stock  transfer  book,  relying  upon  the  stock  certifi- 
cate book,  with  its  stubs  and  canceled  certificates,  for  the 


188  CORPORATE    MANAGEMENT. 

authorization  and  record  of  transfers.  In  New  Jersey,  how- 
ever, the  statutes  require  every  corporation  to  keep  a  transfer 
book. 

While  the  stock  certificate  book,  properly  kept,  is,  without 
the  transfer  book,  legally  sufficient,  it  does  not  give  the  com- 
pact, convenient  record  that  the  transfer  book  does,  and  for 
this  reason  this  latter  book  is  kept  by  most  large  corporations 
and  by  many  of  the  smaller  ones.  Where  kept  at  all,  every 
transfer  should  be  entered  in  the  transfer  book  in  due  form  and 
in  proper  order. 

Where  the  transfer  book  is  used,  the  transfers  are  signed  by 
the  party  making  the  transfer,  or  by  his  duly  authorized 
agent.  Should  the  owner  of  the  stock  to  be  transferred  come 
in  person  and  sign  his  transfer  in  the  stock  transfer  book,  there 
would  be  no  necessity  for  his  signature  to  the  assignment  on 
the  back  of  his  stock  certificate.  In  perhaps  ninety-nine  cases 
out  of  a  hundred,  however,  the  owner  of  the  stock  signs  the 
assignment  on  the  back  of  his  certificate,  usually  leaving  the 
name  of  his  attorney  to  be  filled  in  later  by  the  secretary  of  the 
company  when  the  certificate  is  presented  for  transfer,  and 
the  attorney  so  designated  signs  the  transfer  in  the  book.  ( See 
§  44;  also  Forms  17,  18,  149.) 

The  larger  corporations  usually  appoint  special  transfer 
agents  and  registrars,  whose  duties  are  to  supervise  and  reg- 
ister the  issue  and  transfer  of  stock.  The  transfer  agent  super- 
vises the  issue  and  transfer  of  stock  and  countersigns  each 
certificate  as  evidence  that  it  is  properly  issued,  and,  in  the  case 
of  transfers,  that  the  transfer  has  been  properly  made.  The 
registrar  keeps  a  record  of  all  stock  issued  and  countersigns 
each  certificate  as  an  evidence  that  it  is  rightfully  issued  and 
duly  recorded.  Frequently  the  functions  of  both  transfer 
agent  and  registrar  will  be  filled  by  one  person  or  institution, 
usually  by  a  trust  company.  The  appointment  of  a  competent 
transfer  agent  and  registrar  prevents  the  possibility  of  any 
over-issue  or  other  irregularity  in  the  issue  of  stock,  inspires 


CORPORATION    BOOKS.  139 

confidence  among  the  stockholders  and  relieves  the  officers  of 
the  company  of  a  heavy  and  onerous  responsibility. 

§  149.  Stock  Book. 

The  stock  book  and  the  stock  ledger  are  practically,  and 
should  be,  one  and  the  same  book,  ordinarily  kept  under  the 
title,  "  Stock  Ledger."  In  New  York,  however,  the  statutes 
provide  specifically  that  a  stock  book  shall  be  kept,  containing 
the  names,  alphabetically  arranged,  of  all  the  stockholders, 
their  places  of  residence,  the  number  of  shares  held  by  each, 
the  time  when  each  one  became  the  owner  of  the  stock  held  by 
him,  the  amount  paid  thereon,  from  whom  such  stock  was 
received  and  to  whom  transferred.  A  properly  arranged  stock 
ledger  would,  as  a  matter  of  course,  contain  all  the  more 
important  of  these  items,  but  to  comply  with  the  letter  of  the 
New  York  law  numerous  blank  books  have  been  devised,  gen- 
erally clumsy,  laborious  to  keep  and  unsatisfactory  when  kept. 
These  books  are  usually  arranged  as  a  combined  stock  book 
and  ledger,  with  stock  ledger  columns  following  the  stock 
book  entries,  in  order  to  avoid  keeping  an  extra  book,  but  even 
in  this  form  they  are  far  from  ideal. 

The  smaller  corporations,  with  few  stockholders,  may,  with 
advantage,  use  a  form  of  stock  book  so  designed  that  it  can  be 
bound  in  the  same  covers  with  the  stock  certificates,  thereby 
saving  the  multiplication  of  books.  Form  150  illustrates  a 
combined  stock  book  and  ledger  that,  while  giving  an  efficient 
ledger  record  of  the  stock  held  by  each  stockholder,  also  con- 
tains all  the  items  required  by  the  New  York  statutes.  (See 
§  46,  Stock  and  Transfer  Books.) 

§  150.  Stock  Ledger. 

The  stock  ledger  is  kept  to  show  the  number  of  shares  of 
stock  received  and  transferred  by  each  stockholder  and  the 
balance  at  any  time  to  his  credit.  When  he  receives  stock  he 
is  credited  with  the  number  of  shares  acquired ;  when  he  parts 
with  stock  he  is  debited  with  the  number  of  shares  sold.  The 


140  CORPORATE    MANAGEMENT. 

balance,  if  any,  will  always  be  on  the  credit  side  and  will  show 
the  number  of  shares  upon  which  the  stockholder  is  entitled  to 
vote  and  draw  dividends.  A  trial  balance  may  be  taken  from 
time  to  time  between  these  credit  balances  and  the  number  of 
shares  outstanding  as  shown  by  the  open  stubs  of  the  stock 
certificate  book.  The  stock  ledger  is  kept  by  the  secretary  and 
must  not  be  confused  with  any  book  of  like  name  kept  by  the 
treasurer  to  show  payments  of  subscription  instalments  or  the 
apportionment  of  dividends.  (See  Form  151.) 

The  stock  ledger  can  readily  be  made  to  answer  all  the 
requirements  of  the  New  York  stock  book,  so  that  it  will  serve 
the  purposes  of  both  books.  The  form  given  (Form  151),  if 
alphabetically  arranged,  would  answer  these  requirements. 
Such  a  book  would  also  comply  with  the  demands  of  the  New 
Jersey  law,  which  provides  that  "  the  stock  books  "  must  con- 
tain the  names  and  addresses  of  the  stockholders  and  the  num- 
ber of  shares  held  by  each. 

§  151.  General. 

In  New  York,  a  stock  book  containing  the  entries  required 
under  that  head  by  §  29  of  the  Stock  Corporation  Law  (See 
§  149)  must  be  kept.  This  is  the  only  corporate  book  spe- 
cifically required  by  New  York  laws.  The  other  corporate 
books  are  kept  as  a  matter  of  convenience.  In  New  Jersey  the 
laws  require  that  a  stock  book,  which  is  generally  understood 
to  be  a  stock  ledger,  and  a  transfer  book,  shall  be  kept  in  the 
state  office  of  the  corporation. 

Under  the  provisions  of  the  New  York  law,  the  stock  book 
must  be  kept  open  for  the  inspection  of  stockholders  and  judg- 
ment creditors  for  at  least  three  business  hours  each  day. 
Under  the  laws  of  New  Jersey,  "  the  transfer  books  "  and  "  the 
stock  books  "  are  to  be  open  to  the  inspection  of  stockholders 
during  the  usual  hours  for  business.  In  both  states  penalties 
are  provided  for  any  neglect  or  refusal  to  exhibit  such  books  to 
parties  entitled  to  their  inspection.  (See  §  46.)  The  right  to 
inspect  includes  also  the  right  to  copy. 


CHAPTER  XVI. 
SUNDRY  DUTIES  OF  THE  SECRETARY. 


§  152.  Execution  of  Contracts. 

The  secretary  has  no  power  by  virtue  of  his  office  to  bind 
the  corporation  by  contract.  Should  he  attempt  to  do  so,  the 
company  might  either  ratify  such  contracts  by  direct  action  or 
by  acceptance  of  their  terms,  or  might  reject  them  and  refuse 
to  be  bound  thereby.  It  should  be  noted,  however,  that  if  the 
company  has  habitually  transacted  its  business  through  the 
secretary,  or  has  given  into  his  charge  some  portion  of  the 
corporate  business,  it  will  be  bound  by  any  contracts  he  may 
make  within  the  scope  of  such  employment.  Also  the  corpo- 
ration may  specially  authorize  the  secretary  to  enter  into  and 
execute  for  the  company  any  particular  contract,  though  usu- 
ally in  such  matters  the  secretary  is  required  to  act  in  conjunc- 
tion with  one  or  more  of  the  other  officers  of  the  company. 
(See  §  85.) 

The  secretary  usually  has  the  seal  of  the  company  in  his 
sole  charge,  unless  otherwise  provided  by  charter  or  by-laws, 
and  ordinarily  should  not  let  it  go  out  of  the  company's  office. 
He  should  affix  it  to  all  such  corporate  instruments  as  require 
sealing.  The  general  rule  on  this  point  is  that  all  instruments 
that  require  a  seal  when  executed  by  an  individual  require  the 
corporate  seal  when  executed  by  a  corporation.  It  is  quite 
customary,  however,  to  use  the  corporate  seal  on  all  formal 
corporate  instruments.  (See  §  97.) 

When  the  secretary  is  authorized  by  usage,  or  by  resolution 
of  the  directors,  to  execute  a  contract,  the  instrument  should 

141 


143  CORPORATE    MANAGEMENT. 

be  made  out  in  the  name  of  the  corporation,  and  the  signature 
should  be  the  full  legal  name  of  the  corporation,  followed  by 
the  secretary's  official  signature.  (See  Form  103.) 

The  name  of  the  corporation  should  always  appear.  A 
promissory  note  signed  simply,  "  Wilson  M.  Barnes,  Secre- 
tary," would  make  the  secretary  personally  responsible,  and 
might  require  proof  of  its  use  and  purpose  before  the  corpora- 
tion would  be  bound. 

Where  the  secretary  signs  the  instrument  in  his  official 
capacity,  and  the  seal  is  also  affixed,  an  attestation  of  the  seal 
is  not  necessary.  If,  however,  the  secretary  does  not  sign  the 
instrument,  he  should  attest  the  seal.  (See  Form  104.) 

Where  a  corporate  instrument  is  to  be  acknowledged,  the 
notary  public  should  not  be  an  officer  or  stockholder  of  the 
.company.  (See  Chap.  XXXVII.) 

§  153.  Reports  and  Statements. 

Reports  are  usually  required  of  a  company  by  the  laws  of 
the  state  in  which  it  is  incorporated.  If  the  company  is  doing 
business  in  another  state,  other  reports  will  have  to  be  made  in 
this  state  of  domicile  as  well.  These  reports  usually  have  to 
be  made  by  designated  officials  of  the  company,  or  some  two 
of  them.  Even  when  it  does  not  devolve  upon  the  secretary 
to  make  out  reports,  he  should  note  the  date  for  each  on  his 
corporate  calendar  and  remind  the  proper  officer,  or  officers, 
at  the  time  when  such  reports  must  be  made  out  and  filed. 
Financial  reports  would  naturally  be  made  out  by  the  treasurer, 
but  other  reports  would  usually  require  to  be  prepared,  if  not 
executed,  by  the  secretary.  Blank  forms  for  all  required 
reports  are  usually  furnished  by  the  authorities  to  whom  they 
are  to  be  made,  or  if  not,  can,  in  most  cases,  be  secured  from 
any  law  stationer. 

§  154.  Tax  Reports. 

Tax  reports,  as  made  out  by  the  secretary  or  treasurer, 
require  great  care  in  their  preparation.  In  New  York  it  should 


SUNDRY    DUTIES    OF    THE    SECRETARY.  143 

be  remembered  that  corporations  are  entitled  to  certain  exemp- 
tions, reductions  and  allowances  from  the  local  taxes.  In 
many  of  the  other  states  this  also  holds  true.  It  is  not  possible 
within  the  limits  of  the  present  work  to  go  into  this  matter, 
but  it  is  important  that  the  subject  of  taxation  be  given  careful 
attention  and  all  rightful  deductions  secured.  As  compared 
with  firms  or  individuals,  corporations  are  at  a  disadvantage 
in  either  avoiding  or  evading  taxation.  (See  comment  on 
Forms  19  and  20.) 

§  155.  Corporate  Calendar. 

The  corporate  calendar,  or  some  equivalent,  is  almost  indis- 
pensable to  the  proper  discharge  of  the  secretary's  duties.  It 
consists  of  chronological  memoranda  of  the  important  corpo- 
rate matters  to  be  attended  to  by  the  secretary  or  by  the  other 
officers  of  the  corporation.  It  is  simple  and  easily  arranged, 
and  its  use  will  insure  attention  to  these  important  matters  at 
the  proper  time. 

The  corporate  calendar  should  be  kept  upon  a  calendar  pad, 
or  in  the  minute  book,  or  in  some  other  manner  so  that  it  is 
readily  accessible  at  any  and  all  times.  It  will  be  found  advan- 
tageous under  some  circumstances  to  arrange  it  in  regular 
calendar  form,  so  that  it  may  be  hung  or  placed  in  constant 
sight,  with  a  card  for  each  month,  or  for  each  quarter,  as  may 
be  desired. 

The  dates  for  the  corporate  calendar  will  vary  in  the  differ- 
ent states,  and  according  to  the  by-law  requirements  of  the 
particular  company,  but  in  general  the  following  points  should 
be  covered : 

1.  Closing  of  transfer  books. 

2.  Notices  for  annual  meeting. 

3.  Preparation  of  alphabetical  list  of  stockholders. 

4.  Annual  meeting. 

5.  Notices  of  directors'  meeting. 

6.  Directors'  meetings. 

7.  Dividend  days. 

8.  Dates  for  making  reports. 

9.  Dates  for  payment  of  taxes. 


144  CORPORATE    MANAGEMENT. 

Other  matters  pertaining  to  the  particular  corporation  that 
should  appear  in  the  corporate  calendar  will  readily  suggest 
themselves  to  the  secretary.  Much  care  should  be  exercised  in 
the  preparation  of  the  calendar,  as,  improperly  prepared,  it 
would  tend  to  the  very  irregularities  it  was  designed  to  prevent. 

Corporate  calendars  for  New  York  and  New  Jersey  corpo- 
rations will  be  found  under  Forms  155  and  156. 

§  156.  Finale. 

In  conclusion,  it  may  be  said  that  the  secretary  should  be 
well  informed  as  to  all  ordinary  corporate  law  and  procedure, 
as  such  information  is  more  necessary  for  him  than  for  any 
other  corporation  official.  The  president  may  be,  and  often  is, 
merely  a  figurehead.  The  treasurer  is  not  supposed  ordinarily 
to  interest  himself  outside  the  round  of  his  official  duties,  and, 
in  most  cases,  confines  his  attention  to  the  signing  of  checks, 
the  collection  of  accounts  and  the  supervision  of  the  corporate 
finances  and  their  records.  The  secretary,  however,  must  not 
only  attend  to  his  own  official  duties,  which  require  a  very 
general  knowledge  of  corporate  procedure,  but  is  usually 
expected  to  supply  the  deficiencies  and  supplement  the  knowl- 
edge of  his  official  associates,  and  generally  to  see  to  the  well- 
working  of  the  corporate  machinery. 

The  secretary  should  be  supplied  with  a  practical  work  on 
corporation  management.  In  addition,  he  will  find  a  copy  of 
the  statutes  of  his  state  relating  to  corporations  of  much  use. 
Also  a  manual  of  parliamentary  procedure  will  be  helpful. 

Where  the  statute  law  modifies  the  law  given  in  the  secre- 
tary's work  on  management,  or  where  additional  formalities 
are  reauired,  such  facts  should  be  noted  on  the  margins  of  the 
proper  pages  of  the  work  on  management,  in  order  to  make  it 
complete  for  that  particular  state.  A  volume  so  annotated  will 
be  found  almost  invaluable,  not  only  for  the  secretary,  but  for 
the  use  of  the  other  corporation  officials  as  well. 


PART  IV FORMS. 


CHAPTER  XVII. 
SUBSCRIPTION    LISTS. 


Subscription  papers  vary  according  to  the  conditions  under 
which  they  are  used.  Perhaps  the  majority  of  corporations  are 
formed  without  any  formal  subscription  to  stock,  as,  for  exam- 
ple, where  a  corporation  is  organized  to  take  over  an  existing 
business  or  a  property,  and  its  stock  is  issued  in  payment  there- 
for. In  such  case  the  few  subscribers  legally  required  for 
incorporation  merely  sign  the  charter  application  in  which  their 
subscriptions  are  set  forth. 

Subscription  agreements  are  construed  liberally  by  the 
courts  in  accordance  with  their  intent.  It  is,  however,  prudent 
to  have  all  essential  features  of  the  proposed  incorporation 
plainly  stated.  The  forms  which  follow  are  suggestive  and  may 
be  modified  to  suit  any  special  case. 

The  ordinary  subscription,  being,  as  a  matter  of  fact,  a 
proposition  to  the  corporation,  is  not  binding  until  the  corpo- 
ration has  been  formed  and  has  accepted  the  subscriptions,  as 
until  the  corporation  has  come  into  being  it  cannot  be  a  party 
to  the  proposed  contract.  Until  acceptance  by  the  corporation, 
the  subscription  is  a  mere  promise  without  consideration  and 
subscribers  may  freely  revoke  their  offers. 

To  avoid  this  difficulty,  trustees,  agents  or  a  committee  on 
organization  may  be  named  in  the  subscription  as  the  other 
party  or  parties  to  the  contract.  (Forms  2,  3  and  5  are 
10  145 


146  CORPORATE  MANAGEMENT. 

examples. )  The  agreement  is  thereby  completed  before  organ- 
ization of  the  company  and  subscriptions  thereunder  are,  in 
accordance  with  their  terms,  binding  and  irrevocable. 

If  the  law  under  which  the  corporation  is  to  be  organized 
requires,  as  is  the  case  in  some  states,  that  all  or  a  certain  propor- 
tion of  the  stock  shall  be  subscribed  for  as  a  condition  precedent 
to  beginning  business,  subscribers  cannot  be  held,  unless  they 
waive  this  right  by  the  terms  of  subscription,  until  the  required 
amount  of  bona  fide  subscriptions  are  obtained. 

Any  material  change  of  the  conditions  set  out  in  a  subscrip- 
tion list  releases  the  subscribers. 

Any  person  competent  to  contract  may  make  a  binding 
subscription  for  stock.  Usually,  one  corporation  cannot  sub- 
scribe for  the  stock  of  another  corporation,  the  laws  of  most 
of  the  states  prohibiting  one  corporation  from  holding  the  stock 
of  another. 

When  a  subscription  list  overruns  the  first  page,  additional 
sheets  similarly  ruled  are  pasted  on  below,  or  bound  up  with  it 
in  ordinary  form.  For  extensive  subscriptions,  books  are  some- 
times used.  It  is  more  convenient,  however,  to  have  a  number 
of  similar  lists  printed  or  typewritten,  so  that  they  may  be 
circulated  freely. 

Form  i. — Subscription  List.    Simple  Form. 

SUBSCRIPTION  LIST. 
THE  WILSON  MANUFACTURING  COMPANY. 


To  be  Incorporated  under  the  Laws  of  New  York. 


Capital  Stock $25,000. 

Shares $100  each. 


We,  the  undersigned,  hereby  severally  subscribe  for  and  agree  to 
take  at  its  par  value  the  number  of  shares  of  the  Capital  Stock  of  The 
Wilson  Manufacturing  Company  set  opposite  our  respective  names,  and 


SUBSCRIPTION   LISTS. 


147 


agree  to  pay  therefor  in  cash  on  demand  of  the  Treasurer  as  soon  as 
said  Company  is  organized. 

Albany,  New  York,  February  16,  1903. 


NAMES. 

ADDRESSES. 

SHARES. 

AMOUNT. 

Henry  T    Raymond  

Cohoes    New   York.  . 

$500  oo 

Charles  B.   Hill  

10 

I,OOO  OO 

This  subscription  list  is  informal,  but  will  be  found  sufficient 
for  small  corporations  where  the  purposes  and  conditions  of 
subscription  are  well  understood.  The  subscriptions  under  it 
would  not  be  irrevocable  until  the  organization  of  the  company 
and  the  acceptance  by  it  of  the  subscriptions  then  in  force. 

For  Treasurer's  Receipt  for  payments  of  subscriptions  on 
foregoing  list,  see  Form  8. 


Form     2. — Subscription     List.       Preliminary     Payment     to 
Trustee. 


SUBSCRIPTION  LIST. 
ORMOND  BRASS  COMPANY. 


To  be  Incorporated  under  the  Laws  of  New  York  for  the  Manufacture 
of  Brass  and  Metal  Ware. 


Capital  Stock,  $200,000. 


Shares,  $100  each. 


We,  the  undersigned,  hereby  severally  subscribe  at  par  for  the  num- 
ber of  shares  of  the  capital  stock  of  the  Ormond  Brass  Company  set 
opposite  our  respective  signatures,  and  hereby  promise  and  agree  to  pay 
therefor  as  follows: 

Five  per  cent,  of  subscription  on  demand  to  Alvin  L.  Bell,  as  Trustee 
for  the  said  Company,  such  payment,  or  so  much  thereof  as  may  be 
necessary,  to  be  used  for  the  preliminary  and  incorporating  expenses  of 
said  Company;  50%  of  subscription  to  the  Treasurer  of  the  Company 
ten  days  after  the  incorporation  thereof,  and  the  remainder  of  subscrip- 
tion at  such  times  and  in  such  instalments  as  may  be  prescribed  by  the 
Board  of  Directors. 

New  York,  January  15,  1903. 


NAMES. 

ADDRESSES. 

SHARES. 

AMOUNT. 

John  M    James  

30  Broad  St.,  N.  Y  

35 

$3,500  oo 

148  CORPORATE  MANAGEMENT. 

A  subscription  list  like  this  is  held  to  be  a  contract  between 
the  subscribers  and  the  trustee.  Subscriptions  under  it  cannot 
be  withdrawn  nor  revoked,  but  are  binding  from  the  time  of 
signature. 

For  Trustee's  Receipt  in  connection  with  the  above  list,  see 
Form  7.  For  Instalment  Certificate,  see  Form  10. 

Form  3. — Subscription  List.    Agreement  with  Promoters. 

SUBSCRIPTION  LIST. 
RAYMOND  MILLING  COMPANY. 


A  Corporation  to  be  Organized  under  the  Laws  of  the  State  of  New 
Jersey  with  a  Capital  Stock  of  $1,000,000. 


We,  the  undersigned,  for  the  purpose  of  providing  working  capital 
for  the  Raymond  Milling  Company,  a  corporation  to  be  organized  for 
the  purposes  and  under  the  conditions  set  forth  in  the  attached  statement, 
hereby  severally  subscribe  for  the  number  of  shares  of  the  Treasury  Stock 
of  said  Company  set  opposite  our  respective  names,  at  the  rate  of  fifty 
dollars  ($50)  for  each  One  Hundred  Dollar  ($100)  share,  and  agree  to 
pay  the  amounts  of  our  respective  subscriptions  to  the  Treasurer  of  such 
Company  as  soon  as  said  Company  is  incorporated  and  its  Treasury 
Stock  ready  for  issue;  said  stock  to  be  delivered,  full-paid  and  non- 
assessable, upon  payment  of  the  said  purchase  price. 

It  is  mutually  agreed  between  the  subscribers  hereto  and  Hugo  W. 
Williams  and  Henry  B.  Shaw,  of  Morristown,  New  Jersey,  promoters 
of  said  enterprise,  that  these  subscriptions  are  conditioned  upon  bona  fide 
subscriptions  for  two  hundred  and  fifty  thousand  dollars  ($250,000)  being 
secured  hereto  within  ninety  days  from  the  date  hereof. 

Morristown,  New  Jersey,  February  10,  1903. 


NAMES. 

ADDRESSES. 

SHARES. 

AMOUNT. 

Henry  G    Wilton  

Morristown    N    J 

500 

$2  5OO  OO 

This  subscription  list  would  be  circulated  by  the  promoters 
with  a  statement  attached  giving  full  details  as  to  the  capitaliza- 
tion and  purposes  of  the  company.  When  signed  it  forms  an 
irrevocable  contract  between  each  subscriber  and  .the  two  pro- 
moters, and  could  be  enforced  according  to  its  terms. 


SUBSCRIPTION   LISTS.  149 

In  order  to  comply  with  the  subscription  requirement  that 
stock  be  delivered  to  the  purchasers  full-paid,  notwithstanding 
the  fact  that  the  subscription  price  amounts  to  but  one-half  its 
face  value,  the  stock  would,  under  the  usual  plan,  be  first  issued 
at  par  to  the  trustees,  or  other  suitable  parties,  in  payment  for 
the  patents  or  other  property  to  be  acquired  by  the  new  com- 
pany. This  would  render  the  stock  so  issued  full-paid  and 
non-assessable.  The  parties  to  whom  this  stock  was  issued 
would  turn  back  such  amount  of  the  stock  as  might  have  been 
agreed  upon — usually  under  the  guise  of  a  donation — to  the 
treasury  of  the  company  to  be  used  in  raising  the  requisite 
working  capital.  As  full-paid  treasury  stock  this  could  then  be 
issued  to  the  subscribers  at  the  specified  rate  of  $50  per  share 
and  would  still  remain  full-paid  and  non-assessable.  (See 
§§4i,48.) 

Form  4. — Subscription  Blank.     Individual. 

SUBSCRIPTION  BLANK. 

THE  NEW  CENTURY  WHEEL  COMPANY, 
20  Broad  St.,  New  York. 


To  be  Incorporated  under  the  Laws  of  New  Jersey. 


Capital  Stock $200,000. 

Shares $100  each. 


I  hereby  subscribe  for shares  of  the  Capital  Stock  of 

the  New  Century  Wheel  Company  at  the  par  value  thereof,  and  agree  to 
pay  50%  of  such  subscription  on  demand  of  the  treasurer  so  soon  as  said 
Company  is  incorporated;  the  remainder  to  be  paid  at  such  times  and  in 
such  amounts,  not  exceeding  10%  of  said  subscription  in  any  one  month, 
as  may  be  prescribed  by  the  Board  of  Directors. 

Unless  one-half  of  the  Capital  Stock  of  said  Company  is  reliably  sub- 
scribed on  or  before  the  3ist  day  of  December,  1902,  and  the  Company 
incorporated  within  thirty  days  thereafter,  this  subscription  shall  be 
void  and  of  no  effect. 

Dated  at. . 


160  CORPORATE  MANAGEMENT. 

The  above  form  is  usually  sent  out  by  mail,  accompanied  by 
such  statements,  prospectuses  and  explanations  as  may  be  neces- 
sary. Any  material  misstatement  of  fact  in  such  accompanying 
papers  would  render  the  subscription  voidable  at  the  option  of 
the  subscriber  even  after  the  organization  of  the  company. 

When  individual  subscription  blanks  are  sent  out,  they  are 
usually  endorsed  "  The  right  is  reserved  to  reject  or  pro  rate 
any  or  all  subscriptions,"  so  that  any  objectionable  subscriptions 
may  be  refused,  or,  should  the  stock  be  oversubscribed,  so  that 
the  subscriptions  may  be  proportionately  scaled,  or  reduced,  to 
the  amount  of  stock  offered. 

Form  5. — Subscription  List.     Preferred  Stock  with  Bonus. 

SUBSCRIPTION  LIST. 
ROANOKE  RIVER  FRUIT  AND  LAND  COMPANY. 


Capital  Stock,  $600,000;  Common  Stock,  $450,000;  Preferred  Stock, 

$150,000. 

Shares,  $100  each. 


WILBUR  BARRETT,  ~i 

EDGAR  L.  MORGAN,  V  Committee  on  Organization. 

Louis  B.  SAMMIS,J 

We,  the  undersigned,  do  hereby  severally  subscribe  for  the  number 
of  shares  of  the  preferred  stock  of  the  Roanoke  River  Fruit  and  Land 
Company  set  opposite  our  respective  names,  at  the  par  value  of  $100 
per  share,  and  contract  and  agree  with  the  above-named  Committee  on 
Organization  to  pay  50%  of  the  amount  of  such  subscription  to  the  Treas- 
urer of  the  Company  on  demand,  so  soon  as  said  corporation  is  organ- 
ized, and  the  remainder  on  or  before  the  first  day  of  June,  1903,  provided 
that  not  less  than  $75,000  face  value  of  preferred  stock  of  the  Company 
shall  have  been  subscribed  for  in  good  faith  on  the  terms  herein  set 
forth,  on  or  before  the  date  fixed  for  the  incorporation  of  said  Company. 

The  said  Roanoke  River  Fruit  and  Land  Company  is  to  be  incor- 
porated under  the  laws  of  Virginia,  not  later  than  May  i,  1003,  with  a 
Capital  Stock  of  $600,000,  divided  into  6,000  shares  of  the  par  value  of 
$100  each ;  1,500  shares  of  said  stock  to  be  6%,  cumulative,  preferred 
stock  and  4,500  shares  common  stock.  The  preferred  stock  hereby  sub- 
scribed for  may  be  redeemed  at  any  time  after  five  years  at  the  option 
of  the  Company  by  payment  of  $105  per  share  and  any  accrued  interest, 
or  may  be  exchanged  by  the  holder,  at  its  par  value,  at  any  time  before 
redemption,  for  either  town  lots,  lands  or  fruit  farms  belonging  to  the 
Company,  at  the  regular  selling  price  thereof. 


SUBSCRIPTION   LISTS  151 

With  each  share  of  preferred  stock  hereby  subscribed  for,  and  paid 
for  in  accordance  with  the  terms  of  subscription,  the  subscriber  is  to 
receive  as  a  bonus  one  share  of  the  full-paid  and  non-assessable  common 
stock  of  the  Company. 

New  York,  January  i,  1903. 


NAMES.  ADDRESSES. 


SHARES. 


AMOUNT. 


Henry  V.  Nelson 52  Broadway,  N.  Y. 

Albert  T.  Raines Norfolk,   Virginia... 


50 
10 


$5,000  oo 
1,000  oo 


Such  a  subscription  list  is  usually  accompanied  by  a  pro- 
spectus or  statement  setting  out  more  fully  the  general  purposes 
of  the  company,  the  plan  of  its  organization  and  the  basis  upon 
which  the  subscription  is  asked. 

After  the  organization  of  a  company,  subscription  lists  are 
not  usually  employed  for  the  sale  of  its  stock,  separate  subscrip- 
tion blanks  being  sent  out  to  prospective  purchasers.  These 
blanks  are  generally  very  simple.  The  following  is  a  common 
form: 

Form  6. — Subscription  Blank.     After  Organization. 


THE  ST.  JOHN  GOLD  MINING  CO. 
6  Wall  St.,  New  York. 


Capital  Stock $1,000,000. 

Shares $10  each. 


Enclosed  find  certified  check  for in  payment  for. ...... ;. . 

Shares  of  the  full-paid,  non-assessable  stock  of  the  St.  John  Gold  Mining 
Company. 

Issue  Certificate  to 

Street 

City 

State 

Date 1902. 

Make  checks  payable  to  order  of  the  Company.  The  right  is  re- 
served to  reject  or  pro  rate  subscriptions.  Give  full  name  of  party  to 
whom  stock  is  to  be  issued. 


152  CORPORATE  MANAGEMENT. 

The  above  form  would  be  modified  to  meet  the  conditions 
of  any  particular  company.  Such  a  blank  would  usually  be 
accompanied  by  a  prospectus  giving  full  details  of  the  company, 
its  organization  and  its  work,  and  giving  any  conditions  of  the 
subscription  not  mentioned  in  the  subscription  list. 

In  New  York  any  subscription  after  organization  must  be 
accompanied  by  at  least  ten  per  cent,  of  its  amount  before  such 
subscription  becomes  binding. 


CHAPTER  XVIII. 
RECEIPTS    FOR    SUBSCRIPTIONS. 


When  full  payment  is  made  of  a  subscription,  the  stock  is 
usually  issued  to  the  subscriber  at  once,  and  no  other  receipt 
is  necessary,  the  possession  of  the  full-paid  certificate  for  such 
stock  being  sufficient  evidence  of  payment. 

Where,  however,  payment  is  not  in  full,  or  where  payment 
is  made  in  whole  or  in  part  before  the  organization  of  the 
company,  or  even  at  times  where  payment  is  made  in  full  after 
organization,  but  the  stock  of  the  company  is  not  ready  for 
delivery,  formal  receipts  are  given  for  the  moneys  so  paid,  the 
form  of  receipt  depending  upon  the  conditions  of  payment. 

Payments  on  stock  subscriptions  are,  after  incorporation, 
made  to  the  treasurer  of  the  company  and  receipts  issued  by 
him.  (See  Form  8.)  If  any  such  payments  are  to  be  made 
before  incorporation  a  trustee  is  appointed  to  receive  and 
receipt  therefor  and  to  act  for  the  company  until  its  organiza- 
tion. This  trustee  is  usually  selected  by  the  promoters  of  the 
enterprise  and  named  as  trustee  in  the  subscription  list.  Where 
this  is  not  done,  a  trustee  might  be  selected  later  by  action  of  the 
subscribers. 

The  receipt  for  preliminary  payments  given  by  such  trustee 
would  be  as  in  Form  7  on  the  following  page.  This  receipt 
would  be  neatly  printed  and  bound  in  book  form,  with  perfo- 
rations between  the  stub  and  receipt  so  that  this  latter  may  be 
easily  torn  out  and  given  to  the  party  making  payment.  The 
stub  is  retained  as  the  trustee's  record  of  the  transaction.  The 
form  as  given  shows  the  receipt  filled  out,  signed  and  ready  to 
be  issued.  If  it  were  desired  to  assign  this  receipt,  the  form 
of  assignment  would,  with  the  proper  change  in  the  name  of 
the  instrument  assigned,  be  the  same  as  for  instalment  scrip. 
(See  Form  12.) 

153 


154 


CORPORATE  MANAGEMENT. 


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RECEIPTS  FOR   SUBSCRIPTIONS. 


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156  CORPORATE  MANAGEMENT 

If  the  company's  stock  certificates  were  to  be  ready  for 
delivery  shortly,  the  foregoing  treasurer's  receipt  (Form  8) 
would  be  printed  neatly  but  in  the  plainest  style.  Where  there 
is  a  probability  of  some  time  elapsing  before  delivery  of  the 
certificates,  the  receipt  would  usually  be  gotten  up  in  much 
more  elaborate  style,  with  lithographed  or  even  engraved  work. 
These  more  formal  receipts  would  be  signed  by  the  president 
as  well  as  by  the  treasurer,  and,  if  payment  were  made  in  full, 
would  usually  take  the  form  of  the  ordinary  stock  certificate. 
(See  Form  13.)  Blank  assignments  are  frequently  printed 
on  the  back  of  receipts  so  that  they  may  be  easily  transferable. 
The  form  of  this  assignment  follows.  (Form  9.) 

The  treasurer's  receipts  are  usually  bound  in  books  with 
perforations  between  the  stub  and  the  receipt,  so  that  the  latter 
may  be  easily  torn  out,  the  stub  being  left  as  a  record.  When  the 
stock  is  delivered,  the  receipts  are  surrendered  to  the  treasurer 
for  cancellation.  If  in  the  hands  of  the  original  subscriber,  no 
endorsement  would  be  necessary  on  receipts  surrendered.  In 
the  hands  of  an  assignee,  the  assignment  should  be  attached 
to  or  endorsed  on  the  receipt.  If  temporary  stock  certificates 
had  been  issued,  instead  of  receipts,  they  would  require  the 
usual  stock  certificate  endorsement.  (Form  18.) 

Form  9. — Assignment  of  Treasurer's  Receipt. 


For  value  received,  I  hereby  sell,  assign  and  transfer  to  John  W. 
Harmon,  of  New  York  City,  the  within  receipt  and  the  payments  evi- 
denced thereby  and  do  hereby  authorize  and  instruct  the  Secretary  of 
the  Wilson  Manufacturing  Company  to  issue  to  the  order  of  my  said 
assignee,  in  my  place  and  stead,  the  Five  Shares  of  Stock  of  that  Com- 
pany called  for  by  the  within  receipt  and  for  which  the  payments  thereof 
were  made. 

Albany,  New  York,  HENRY  T.  RAYMOND. 

April   10,   1903. 

In  presence  of 

JAMES  S.  SEALEY. 


RECEIPTS   FOR  SUBSCRIPTIONS. 


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168  CORPORATE  MANAGEMENT. 

If  the  corporation  were  a  small  one  and  the  subscribers  were 
close  at  hand,  so  that  they  could  easily  bring  their  instalment 
certificates  in  for  endorsement  of  subsequent  payments,  the 
certificates  might  be  ruled  on  the  back  for  this  purpose  as 
shown  below : 

Form  ii. — Endorsement  for  Instalment  Payments. 


DATE. 

INSTALLMENTS 
PAID. 

SIGNATURE  OF 
TREASURER. 

April  i    1903  

$-JCQ    OO 

Willis  B.  Gould 

May  i    1903  

700  oo 

Willis  B.  Gould 

This  ruling  should  run  across  the  certificate  and  have  a 
sufficient  number  of  lines  to  allow  for  the  probable  number  of 
payments.  As  payments  are  made  the  dates  and  amounts  would 
be  entered  in  the  proper  columns  and  verified  by  the  signature 
of  the  treasurer  in  the  last  column,  one  signature  opposite 
each  payment.  When  this  plan  is  followed,  the  stub  of  the 
certificate  should  also  have  rulings  to  permit  the  same  entries 
of  date  and  amount — without  treasurer's  signature  following — 
to  appear  upon  the  stub,  so  that  both  certificate  and  stub  will 
show  a  complete  record  of  the  transaction. 

Where  possible,  this  arrangement  is  very  satisfactory  and 
convenient,  but,  usually,  and  particularly  in  the  case  of  the 
larger  corporations,  it  is  neither  convenient  nor  safe  to  send 
in  certificates  for  endorsement  at  the  time  of  the  instalment 
payments.  In  such  cases,  as  payments  are  usually  made  by 
check,  they  are  evidenced  by  a  direct  receipt  from  the  treasurer, 
one  for  each  payment  received  by  him.  Such  receipts  are  of 
the  usual  form  and  state  that  the  payment  made  is  for  account 
of  subscription  to  the  stock  of  the  particular  company,  the  pay- 
ment being  identified  by  the  number  of  the  instalment  or  by 
the  date  on  which  the  assessment  was  levied. 


RECEIPTS  FOR  SUBSCRIPTIONS.  159 

Should  the  instalment  certificate  be  sold  or  transferred 
before  full  payment  of  the  subscription,  or  before  delivery  of 
the  stock  had  been  made,  the  following  form  of  assignment 
would  appear  upon  its  back : 

Form  12. — Assignment  of  Instalment  Certificate. 

For  Value  Received,  I  hereby  sell,  assign  and  transfer  to  William 
M.  Sinton,  of  New  York  City,  my  subscription  to  Thirty-five  (35)  Shares 
of  the  Capital  Stock  of  the  Ormond  Brass  Company,  together  with  the 
payments  made  thereon,  all  as  evidenced  by  the  within  Instalment  Cer- 
tificate, and  I  do  hereby  authorize  and  instruct  the  Secretary  of  said 
Company,  upon  completion  of  the  conditions  of  my  said  subscription,  to 
issue  said  stock  to  the  order  of  my  said  assignee. 

JOHN  M.  JAMES. 

New  York,  July  i,  1903. 

In  presence  of 

WILLIAM  B.  SILVERTON. 

«•> 

(See  Form  10.) 

If  payments  had  been  made  on  this  subscription  subsequent 
to  the  issue  of  the  instalment  certificate,  but  before  its  sale  or 
transfer,  these  payments  would  be  evidenced  by  the  treasurer's 
receipts;  and  each  of  these  receipts  would  also  be  assignd  by 
th  following  endorsement  on  the  back  thereof: 

Form  iaa. — Assignment  of  Instalment  Receipt. 

For  Value  Received,  I  hereby  sell,  assign  and  transfer  the  within 
receipt  and  the  payment  evidenced  thereby  to  William  Sinton. 

New  York  City,  JOHN  M.  JAMES. 

July  i,  1903. 

The  form  of  assignment  for  the  sale  of  a  trustee's  receipt 
(Form  9)  would  be  the  same  as  for  an  instalment  certificate, 
the  wording  being  changed  to  correspond  to  the  title  of  that 
instrument. 


CHAPTER  XIX. 
STOCK    CERTIFICATES. 


Stock  certificates  may  be  had  in  many  different  styles,  sizes 
and  forms.  Usually  they  are  prepared  in  quantity  by  the  larger 
publishing  houses  with  lithographed  design  and  body,  the  vari- 
able data,  such  as  the  name  of  company,  state  of  incorporation, 
capital  stock,  etc.,  being  left  for  insertion  by  local  printers.  For 
this  reason  any  variation  from  the  ordinary  forms  is  difficult  to 
secure,  requiring  special  preparation. 

Most  of  the  forms  in  common  use  contain  all  the  essential 
requirements  of  a  stock  certificate,  differing  only  in  manner  of 
expression,  arrangement  of  matter,  design,  etc.,  though  occa- 
sionally serious  defects  are  found.  Such  defects  would  not 
ordinarily  involve  serious  consequences,  but,  as  a  matter  of 
common  precaution,  should  be  avoided. 

Where  an  unusually  fine  certificate  is  desired,  it  is  litho- 
graphed or  engraved  throughout,  and  the  finest  bond  paper  is 
employed.  On  the  other  hand,  where  the  issue  is  but  temporary, 
or  the  incorporators  are  indifferent,  the  certificates  are  merely 
printed,  or  even  written,  on  slips  of  ordinary  paper  and  in 
plainest  design.  A  neat  and  tasteful  certificate  is  always  to  be 
desired.  Ornate  and  tinted  designs  are  supposed  to  be  preferred 
by  the  investing  public.  (See  §§  7,  43  and  147.) 

Usually  the  officers  to  sign  these  stock  certificates  are  desig- 
nated by  the  by-laws  of  the  corporation,  though  in  some  states. 
as  New  Jersey,  the  proper  officials  are  designated  by  the  statutes 
The  form  which  follows  complies  with  the  New  Jersey  statutes 
as  to  signatures. 

The  form  of  certificate  and  stub  given  in  Form  13  will  be 
found  correct,  clear  and  satisfactory : 

160 


STOCK  CERTIFICATES 


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162 


CORPORATE  MANAGEMENT. 


The  words  "  full-paid  and  non-assessable "  should  not 
appear  upon  the  face  of  the  certificate  unless  the  stock  for  which 
it  stands  has  been  paid  for  in  full,  in  cash  or  property.  (See 

§41-) 

The  word  "  Company  "  is  usually  printed  in  full  in  the  stock 

certificate,  though  the  abbreviation   "  Co."   may  be  used   if 
preferred. 

The  stub  given  in  connection  with  the  foregoing  form  of 
certificate  covers  every  ordinary  requirement,  giving  a  complete 
record  of  the  transaction.  It  is  simple  and  easily  kept,  and  is 
very  much  preferable  to  the  stub  form  which  follows  and  which 
is  given  here  merely  because  it  is  in  such  general  use,  and  is 
so  difficult  to  understand,  that  an  explanation  of  it  will  be 
appreciated  by  those  who  are  unable  to  secure  the  better  forms. 
The  blanks  of  this  stub  are,  in  the  example,  filled  with  the  same 
data  as  appear  on  the  preceding  certificate  and  stub  (Form  13). 
The  only  additional  details  appearing  upon  the  following  stub 
are  the  name  of  the  person  to  whom  the  surrendered  certificate, 
No.  1 6,  was  issued,  and  the  number  of  shares  represented  by 
that  certificate. 


Form  14. — Usual  Form  of  Stock  Certificate  Stub. 


Certificate  No.  25. 
For  20  Shares. 
Issued  to 

Henry  S.  Stanford, 

25  William  St.,  New  York. 
Dated,  June  loth,  1903. 
From  Whom  Transferred, 

James  H.  Stanley. 
Dated,  June  ist,  1903. 


NO.   ORIGINAL 

CERTIFICATE. 

16 


NO.    ORIGINAL 
SHARES. 

35 


NO.   OF  SHARES 

TRANSFERRED. 

2O 


Received  Certificate  No.  25  for  20  Shares, 
this  I2th  day  of  June,  1903. 

HENRY  S.  STANFORD. 


STOCK  CERTIFICATES.  163 

This  stub  shows  that  Certificate  No.  16,  for  35  shares 
issued  to  James  H.  Stanley,  was  surrendered,  and  that  20 
shares  therefrom  were  reissued  to  Henry  S.  Stanford.  The 
remaining  15  shares  might  be  held  to  the  credit  of  the  owner 
for  future  reissue,  but  would  probably  be  reissued  at  the  same 
time  in  one  or  more  additional  certificates. 

If  nothing  appears  to  the  contrary  on  the  face  of  a  stock 
certificate,  it  represents  common  stock.  Should  the  company 
issue  preferred  stock,  this  fact  should  show  on  both  the  common 
and  preferred  stock  certificates,  and  the  kind  of  stock  repre- 
sented by  any  particular  certificate  should  appear  unmistakably 
on  its  face.  Were  twenty  thousand  dollars  of  the  stock  of  the 
Marston  Manufacturing  Company  preferred,  the  heading  of 
the  foregoing  certificate  ( Form  13)  would  appear  as  follows : 

MARSTON  MANUFACTURING  COMPANY. 

Capital  Stock $50,000. 

Common  Stock $30,000. 

Preferred    Stock. . .      20,000. 

In  addition  to  this  the  wording  of  the  body  of  the  certificate 
would  be  changed  to  read  "  Twenty  Shares  of  the  Common 
Stock  "  and  the  term  "  Common  Stock "  would  usually  be 
printed  or  lithographed  prominently  across  the  face  of  the 
certificate. 

Preferred  stock  certificates  are  of  the  same  general  form  as 
certificates  for  common  stock,  but  must  show  plainly  that  they 
represent  preferred  stock,  and  the  conditions  under  which  such 
preferred  stock  is  issued  should  appear  upon  the  face  of  the 
certificate.  (  See  §  47. )  The  following  is  a  common  form : 


184 


CORPORATE   MANAGEMENT. 


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STOCK  CERTIFICATES.  165 

This  certificate  shows  that  the  Marston  Manufacturing 
Company  has  an  authorized  issue  of  twenty  thousand  dollars 
of  preferred  stock,  which  is  to  receive  an  annual,  cumulative, 
preferred  dividend  of  six  per  cent.,  is  redeemable  at  any  time 
after  ten  years  at  one  hundred  and  five  dollars  per  share,  with 
payment  of  any  accumulated  dividends ;  that  it  must  be  redeemed 
at  par  with  the  full  payment  of  all  dividends  at  the  expiration 
of  twenty  years ;  that  it  is  non- voting  and  does  not  participate  in 
profits  beyond  its  six  per  cent,  dividend. 

Preferred  stock  certificates  are  usually  numbered  independ- 
ently of  the  common  certificate;  that  is,  the  first  preferred 
certificate  is  numbered  "  I  "  without  regard  to  the  fact  that  the 
first  common  certificate  was  also  numbered  "  i,"  the  two  series 
being  separate  and  distinct  as  to  numbering. 

In  the  following  certificate  the  preferred  stock  first  draws 
its  dividend  of  six  per  cent.,  the  common  stock  then  draws  a 
similar  dividend  if  profits  are  sufficient,  and  any  remaining 
profits  are  apportioned  to  both  preferred  and  common  stock  on 
the  same  basis.  Also,  as  no  restriction  is  placed  upon  the  voting 
rights  of  the  preferred  stock,  it  would  have  the  same  voting 
power  as  the  common  stock.  (See  §  47.) 

Form  1 6. — Preferred  Stock  Certificate.     Special  Form. 

Incorporated  under  the  Laws  of  the  State  of  New  Jersey. 
No.  274.  35  Shares. 

THE  SAN  REMO  WATER  SUPPLY  COMPANY. 

Capital   Stock $200,000. 

Common  Stock 150,000. 

Preferred   Stock 50,000. 

Full  paid  and  Non-assessable. 

This  certifies  that  Willis  H.  Sherwood  is  the  owner  of  Thirty-five 
Shares  of  the  Preferred  Stock  of  the  San  Remo  Water  Supply  Company, 
transferable  only  on  the  books  of  the  Company  by  said  owner,  in  person 
or  by  duly  authorized  attorney,  upon  surrender  of  this  Certificate  prop- 
erly endorsed. 

Said  Stock  is  part  of  an  issue  of  $50,000  par  value,  authorized  upon 
the  terms  herein  set  forth,  by  the  Certificate  of  Incorporation  of  the  said 
Company,  as  filed  in  the  office  of  the  Secretary  of  State  of  New  Jersey 
on  the  sth  day  of  May,  1903. 


166  CORPORATE  MANAGEMENT. 

The  holders  of  this  preferred  stock  are  entitled  to  receive  a  cumula- 
tive, preferential  dividend  of  six  per  cent,  per  annum,  payable  each  year 
out  of  the  net  earnings  of  the  Company  before  any  reservation  is  made 
therefrom  for  working  capital,  and  before  any  dividend  is  paid  upon  the 
common  stock  of  the  Company,  but  should  the  net  earnings  in  any  one 
year  be  insufficient  to  pay  said  preferred  dividend  in  full,  such  portion 
of  said  dividend  as  may  be  possible  shall  be  paid  therefrom,  and  any 
unpaid  dividends  shall  be  a  charge  against  the  net  earnings  of  the  Com- 
pany and  shall  be  paid  in  full  put  of  the  first  available  profits. 

If,  after  paying  said  dividend  of  six  per  cent,  upon  said  preferred 
stock  for  any  year,  together  with  any  or  all  arrearages  thereon,  any 
further  available  profits  shall  remain,  the  Directors  of  the  Company  may, 
at  their  discretion,  declare  and  pay  a  dividend  not  exceeding  six  per 
cent,  upon  the  outstanding  common  stock  of  the  Company,  and,  should 
there  still  remain  available  profits,  may  declare  such  further  and  addi- 
tional dividends  upon  all  the  outstanding  stock  of  the  Company  as  may  by 
them  be  deemed  advisable,  paying  to  common  and  preferred  stock  alike, 
the  same  per  centum  of  any  such  additional  dividends. 

5  CORPORATE  )  Witness  the  Seal  of  the  Company  and  the  signatures 

(      SEAL.     )  of   its   duly  authorized   officers,    affixed    in    the 

City  of  Newark  this  3Oth  day  of  May,  1903. 

HOWARD  C.  ESSELTON,  HENRY  STILSON, 

Treasurer.  President. 

Shares,  $100  Each. 


Where  the  conditions  of  preferred  stock  are  too  numerous 
or  too  lengthy  to  be  set  out  upon  the  face  of  the  certificate,  they 
are  omitted,  and  reference  is  made  on  the  certificate  to  the 
charter,  the  by-laws  or  the  resolution  under  which  such  stock 
has  been  issued.  In  such  cases  the  second  paragraph  of  the 
preceding  certificate  would  be  changed  to  read  as  follows,  and 
the  third  and  fourth  paragraphs  would  be  omitted : 


Said  stock  is  part  of  an  issue  of  fifty  thousand  ($50,000)  dollars  par 
value,  authorized  by  the  Certificate  of  Incorporation  of  the  said  Com- 
pany, as  filed  in  the  office  of  the  Secretary  of  State  of  New  Jersey  on 
the  5th  day  of  May,  1903,  and  is  issued  under  the  terms  and  conditions 
therein  set  forth. 


Preferred  stock  is  sometimes  issued  in  very  crude  form,  the 
ordinary  certificate  (§13)  being  used,  and  the  fact  that  it  repre- 
sents preferred  stock,  together  with  the  conditions  under  which 
such  preferred  stock  is  issued,  being  printed  across  its  face  in 
red,  or  in  some  other  distinctive  style. 


STOCK  CERTIFICATES.  167 

Transfers  of  Stock. 

Stock  is  transferred  by  assignment,  the  form  for  which  is 
placed  upon  the  back  of  the  certificate.  There  is  but  one  form 
of  this  assignment  in  common  use,  which,  though  rather 
informal  and  incomplete  in  some  respects,  is  generally  regarded 
as  sufficient.  This  assignment,  in  case  of  a  sale  of  the  stock 
represented  by  the  certificate,  is  signed  by  the  party  in  whose 
name  the  certificate  stands  and  this  signature  is  duly  witnessed, 
the  remaining  blanks  in  the  form  being  left  to  be  filled  in  later. 

Form  17. — Assignment  in  Blank  of  Stock  Certificate. 

For  Value  Received hereby  sell,  assign  and  transfer  unto 

Shares  of  the 

Capital    Stock   represented   by   the   within    Certificate,   and   do    hereby 

irrevocably  constitute  and  appoint my  Attorney  to 

transfer  the  said  stock  on  the  books  of  the  within-named  Company,  with 
full  power  of  substitution  in  the  premises. 

HARRY  B.  SINCLAIR. 

Dated 190 

In  presence  of 

JOHN  S.  DUNCAN. 

The  signature  to  this  assignment  must  correspond  exactly 
with  the  name  upon  the  face  of  the  certificate. 

Certificates  of  stock  duly  endorsed  in  blank,  as  in  the  form 
given,  may  be  sold  and  passed  from  hand  to  hand,  indefinitely, 
without  transfer  upon  the  books  of  the  company,  until  some 
holder  presents  it  and  takes  out  a  new  certificate  in  his  own 
name.  Such  holder  would  fill  out  the  blanks  still  left  in  the 
assignment,  turn  the  certificate  in  to  the  secretary  of  the  com- 
pany and  receive  in  its  stead  a  new  certificate  made  out  in  the 
name  indicated  by  the  assignment.  The  assignment,  filled  out, 
would  read  as  follows : 

Form  1 8. — Assignment  of  Stock  Certificate.     Complete. 

For  Value  Received,  I  hereby  sell,  assign  and  transfer  unto  Janice 
Bardwell  Ellsworth,  of  New  York  City,  Twenty-five  (25)  Shares  of  the 
Capital  Stock  represented  by  the  within  Certificate,  and  do  hereby 


168  CORPORATE  MANAGEMENT. 

irrevocably  constitute  and  appoint  Henry  S.  Dillworth  my  Attorney  to 
transfer  the  said  stock  on  the  books  of  the  within-named  Company,  with 
full  power  of  substitution  in  the  premises. 

HARRY  B.  SINCLAIR. 
Dated  February  i,  1903. 

In  presence  of 

JOHN  S.  DUNCAN. 

Usually  the  name  of  the  secretary  of  the  company  is  inserted 
as  the  attorney  who  is  to  make  the  transfer  on  the  books  of  the 
company,  though  any  other  suitable  person  might  be  named 
instead.  When  the  assignment  is  completed  as  above  the  certifi- 
cate is  usually  turned  in  and  a  new  certificate  issued  before  any 
further  sales  or  transfers  of  the  stock  it  represents  are  made. 
(See  §§44,  148,  and  Form  149.) 

Assignments  in  blank  of  a  portion  of  the  stock  repre- 
sented by  a  certificate  are  in  practice  never  made.  For  the 
procedure  where  but  a  portion  of  the  stock  of  any  certificate 
is  sold,  see  §  147. 


CHAPTER  XX. 
CHARTER  FORMS. 


The  charter,  or,  as  it  is  usually  termed,  the  certificate  of 
incorporation,  is  the  most  important  instrument  connected  with 
the  organization  of  a  corporation.  It  should  be  drawn  by  a 
competent  attorney  familiar  with  its  possibilities  and  capable 
of  adjusting  these  to  the  needs  of  the  particular  enterprise. 
Much  care  should  be  taken  in  the  preparation  of  the  charter, 
as  upon  its  provisions  largely  depends  the  successful  operation 
of  the  company. 

The  forms  for  charters  vary  with  the  statute  requirements 
of  the  different  states,  though  the  general  form  and  requisites 
are  the  same  in  most  of  the  states.  The  following  charters  for 
New  York  and  New  Jersey  are  included  merely  to  give  a  general 
idea  of  their  form  and  to  make  intelligible  the  many  references 
in  the  present  volume  to  the  charter  and  its  requirements. 

The  forms  given  are  modified  from  existing  charters,  and 
while  simple,  are  clear,  and,  as  far  as  they  go,  complete.  For 
larger  or  more  complex  incorporations  these  forms  would  be 
greatly  expanded  by  amplification  of  the  purposes  and  by  insert- 
ing additional  provisions.  The  essential  features  would,  how- 
ever, be  the  same.  (See  §  10  and  Chapter  II.) 

It  is  to  be  noted  that  the  charter  is  in  form  an  application 
for  a  charter.  If  duly  drawn  and  certified,  it  is,  upon  pay- 
ment of  the  required  fees,  allowed  and  filed  by  the  proper 
state  and  county  officials  as  a  matter  of  course,  and  imme- 
diately becomes  the  charter  of  the  company.  Thereupon 
the  new  corporation  is  fully  authorized  to  proceed  with  its 

169 


170  CORPORATE  MANAGEMENT. 

first  meetings  and  perfect  its  organization,  and,  upon  the 
payment  into  its  treasury  of  the  minimum  amount  with 
wihch  it  can  begin  business,  its  legal  right  are  complete. 

Form  19. — New  York  Charter. 

CERTIFICATE  OF  INCORPORATION 

of  the 
MARSTON  MANUFACTURING  COMPANY. 


We,  the  undersigned,  all  being  of  full  age  and  two-thirds  being  citi- 
zens of  the  United  States,  and  one  of  us  a  resident  of  the  State  of  New 
York,  for  the  purpose  of  forming  a  Corporation  under  the  Business 
Corporations  Law  of  the  State  of  New  York,  do  hereby  certify  and  set 
forth: 

First — The  name  of  said  Corporation  shall  be 

"  MARSTON  MANUFACTURING  COMPANY." 

Second — The  purposes  for  which  said  Corporation  is  formed  are  as 
follows: 

1.  To  buy,  sell,  manufacture  and  generally  deal  in  all  manner  of 
tools,    machinery,    devices,    appliances    and    supplies   used    in   the 
cooper's  trade. 

2.  To  lease,  buy,  sell,  use  and  hold  all  such  property,  real  or 
personal,  as  may  be  necessary  or  convenient  in  connection  with  the 
said  business. 

3.  To  do  any  or  all  things  set  forth  in  this  certificate" as  objects, 
purposes,  powers  or  otherwise,  to  the  same  extent  and  as  fully  as 
natural  persons  might  do,  and  in  any  part  of  the  world. 

Third — The  amount  of  Capital  Stock  of  said  Corporation  shall  be  Fifty 
Thousand  ($50,000)  Dollars. 

Fourth — The  number  of  shares  composing  said  capital  stock  shall  be 
Five  Hundred  (500)  Shares  of  the  par  value  of  One  Hundred  ($100) 
Dollars  each,  and  the  amount  of  capital  with  which  said  Corporation  will 
begin  business  is  Five  Hundred  ($500)  Dollars. 

Fifth — The  principal  business  office  of  said  Corporation  shall  be  in 
the  Borough  of  Manhattan,  in  the  City,  County  and  State  of  New  York. 

Sixth — The  duration  of  said  Corporation  shall  be  perpetual. 
Seventh — The  number  of  directors  of  said  Corporation  shall  be  three. 

Eighth — The  names  and  post-office  addresses  of  the  directors  of  said 
Corporation  for  the  first  year  are  as  follows: 

NAMES.  ADDRESSES. 

Morris  P.  Marston No.  165  Grand  Ave.,  Brooklyn,  N.  Y. 

John  Adams No.  30  Broad  St.,  New  York  City. 

Henry  Cornell Little  Falls,  New  Jersey. 


CHARTER   FORMS. 


171 


Ninth — The  names  and  post-office  addresses  of  the  subscribers  to  this 
certificate,  and  the  number  of  shares  of  stock  which  each  agrees  to  take 
in  said  Corporation,  are  as  follows: 

NAMES.  ADDRESSES.  SHARES. 

Morris  P.  Marston No.  165  Grand  Ave.,  Brooklyn,  N.  Y 25 

John  Adams No.  30  Broad  St.,  New  York  City 10 

Henry  Cornell Little   Falls,   New  Jersey 10 

William  B.  Ames Singac,  New  Jersey 5 

Tenth — Pursuant  to  Section  40  of  the  Stock  Corporation  Law,  as 
amended,  this  Corporation  shall  have  power  to  purchase,  acquire,  hold 
and  dispose  of  the  stocks,  bonds  and  other  evidences  of  indebtedness  of 
any  corporation,  domestic  or  foreign,  and  issue  in  exchange  therefor  its 
stock,  bonds  or  other  obligations. 

In  Witness  Whereof,  we  have  made  and  signed  this  certificate 
in  duplicate  this  fourteenth  day  of  January,  one  thousand 
nine  hundred  and  three. 

MORRIS  P.  MARSTON 
JOHN  ADAMS. 
HENRY  CORNELL. 
WILLIAM  B.  AMES. 
STATE  OF  NEW  YORK,    )       . 
County  of  New  York, ) 

Personally  appeared  before  me  this  I4th  day  of  January,  1903,  Morris 
P.  Marston,  John  Adams,  Henry  Cornell  and  William  B.  Ames,  to  me 
personally  known  to  be  the  persons  described  in  and  who  executed  the 
foregoing  certificate,  and  severally  acknowledged  that  they  executed  the 
same  for  the  purposes  therein  set  forth. 

SETH  LAWSON, 
Notary  Public  for  New  York  County. 

j  NOTARIAL  ) 
(       SEAL.       ) 

The  acknowledgment  of  the  certificate  of  incorporation 
must  be  made  before  a  Notary  Public,  Commissioner  of  Deeds 
or  a  Justice  of  the  Peace.  For  the  procedure  as  to  filing  *ee 
Section  23,  Chapter  II.  The  organization  tax  and  all  fees  must 
be  paid  before  the  certificate  will  be  filed  in  the  office  of  the 
Secretary  of  State.  The  following  table  gives  the  fees  and  taxes 
in  New  York  State : 

TABLE  OF  FEES  AND  TAXES. 


CAPITAL 
STOCK. 

ORGANIZATION 
FEE. 

SUNDRY  FEES 

TOTAL. 

ANNUAL 
TAX. 

$5,000 

$2  50 

$15  oo 

$17  SO 

$7  50 

IO,OOO 

5   00 

15  oo 

20  OO 

15  oo 

SO,OOO 

25  oo 

15  00 

40  oo                     75  oo 

IOO,OOO 

50  oo 

15  oo 

65  oo                    150  oo 

1,000,000 

500  oo 

15  oo 

515  oo                 1.500  oo 

172  CORPORATE  MANAGEMENT. 

The  organization  tax  is  one-twentieth  of  one  per  cent,  of 
the  capitalization.  The  sundry  fees  are  paid  to  different  state 
and  county  officials. 

The  annual  tax  given  in  the  above  table  is  computed  on 
the  supposition  of  a  six  per  cent,  dividend  having  been  declared 
in  the  preceding  year.  If  a  greater  or  less  dividend,  or  no  divi- 
dend at  all  was  declared,  there  would  be  an  equitably  calculated 
difference  in  the  tax  as  given  above.  Also,  New  York  is  peculiar 
in  the  fact  that  the  annual  tax  is  only  laid  upon  that  portion  of 
the  capital  of  the  company  actually  employed  in  the  state.  If 
a  New  York  corporation  employed  but  one-tenth  of  its  capital 
in  the  state,  it  would  pay  but  one-tenth  of  the  tax  as  given. 

Mining,  laundry  and  manufacturing  corporations  operating 
in  the  state  are  exempt  from  these  state  taxes,  providing  at  least 
40  per  cent,  of  their  capital  stock  is  invested  in  the  business 
within  the  state. 

Property  owned  by  a  corporation  in  the  state  is  taxed  locally 
as  if  owned  by  an  individual.  Corporations  having  their  princi- 
pal office  in  New  York  City  are  liable  to  have  to  pay  a  tax  of 
two  per  cent,  and  upward  upon  personal  property,  and  the 
reports  required  make  it  almost  impossible  to  evade  or  reduce 
this  without  perjury.  This  fact  should  receive  careful  consid- 
eration. It  is  here  that  skilled  counsel  can  often  save  much 
future  expense. 

Form  20. — New  Jersey  Charter. 

CERTIFICATE  OF  INCORPORATION 

of  the 
CANFIELD  CHEMICAL  COMPANY. 


We,  the  undersigned,  for  the  purpose  of  forming  a  corporation  under 
and  by  virtue  of  the  provisions  of  an  act  of  the  Legislature  of  the  State 
of  New  Jersey,  entitled  "An  act  concerning  corporations  (Revision  of 
1896),"  and  the  several  supplements  thereto  and  acts  amendatory  thereof, 
do  hereby  severally  subscribe  for  and  agree  to  take  the  number  of  shares 


CHARTER   FORMS.  173 

of  stock  of  the  said  corporation  hereinafter  placed  opposite  our  respective 
names,  and  do  further  certify  and  set  forth  as  follows: 

First — The  name  of  said  corporation  shall  be 

"  CANFIELD  CHEMICAL  COMPANY." 

Second — The  location  of  its  principal  office  in  the  State  of  New  Jer- 
sey shall  be  at  No.  15  Exchange  Place,  Jersey  City. 

The  name  of  the  agent  who  shall  be  therein  and  in  charge  thereof, 
upon  whom  process  against  this  corporation  may  be  served,  is  the  Cor- 
poration Trust  Company  of  New  Jersej. 

Third — The  objects  for  which  this  corporation  is  formed  are: 

(a)  To  manufacture,  prepare,  compound,  mix,  combine,  buy, 
sell  and  generally  deal  in  all  manner  of  chemicals,  chemical  prod- 
ucts, drugs  and  pharmaceutical  compounds  and  preparations,  and 
to  patent,  register  or  otherwise  protect  the  same. 

(fe)  To  obtain,  purchase  or  otherwise  acquire  formulae,  patents 
and  secret  processes  for  the  manufacture  and  preparation  of  chem- 
icals, drugs  and  the  compounds  and  preparations  thereof,  and  to 
operate  under,  sell,  assign,  grant  licenses  in  respect  of,  or  other- 
wise turn  the  same  to  account. 

(c)  To  enter  into,  carry  out  or  otherwise  turn  to  account  con- 
tracts of  every  kind;  to  have  and  maintain  offices  within  and  withr 
out  the  State;  to  acquire,  hold,  mortgage,  lease  and  convey  or 
otherwise  use  or  dispose  of  real  and  personal  property  in  any  part 
of  the  world,  and  in  general  to  carry  on  such  operations  and  enter- 
prises and  to  do  all  such  things  in  connection  therewith  as  may 
be  permitted  by  the  laws  of  New  Jersey  and  be  necessary  or  con- 
venient in  the  conduct  of  the  Company's  business. 

Fourth — The  total  authorized  stock  of  the  corporation  shall  be  seven 
thousand  five  hundred  ($7,500)  dollars,  divided  into  seventy-five  (75) 
shares  of  the  par  value  of  one  hundred  dollars  ($iop)  each,  and  the 
amount  of  capital  stock  with  which  said  corporation  will  begin  business 
is  five  thousand  ($5,000)  dollars. 

Fifth — The  names  and  post-office  addresses  of  the  incorporators  and 
the  number  of  shares  subscribed  for  by  each  are  as  follows: 

NAMES.  ADDRESSES.  SHARES. 

James  L.  Canfield 15  Exchange  Place,  Jersey  City,  N.  J 40 

Edwin  Walker 15  "  " 5 

ElbertJ.  Keen 15  " 5 

Sixth — The  period  of  existence  of  said  corporation  shall  be  unlimited. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and 
seals  this  2ist  day  of  January,  A.  D.  nineteen  hundred  and 
three. 

JAMES  L.  CANFIELD.  [L.  s.] 

EDWIN  WALKER.  [L.  s.] 

ELBERT  J.  KEEN.  [L.  s.] 

In  presence  of 

JOHN  CARSON. 
WARREN  GORHAM. 


174 


CORPORATE  MANAGEMENT. 


STATE  OF  NEW  JERSEY,  1      . 
County  of  Hudson,     J 

Be  it  Remembered,  that  on  this  2ist  day  of  January,  A.  D.  nineteen 
hundred  and  three,  before  the  undersigned,  personally  appeared  James  L. 
Canfield,  Edwin  Walker  and  Elbert  J.  Keen,  who,  I  am  satisfied,  are  tte 
persons  named  in  and  who  executed  the  foregoing  certificate,  and  I,  htv- 
ing  first  made  known  to  them,  and  each  of  them,  the  contents  thereof, 
they  did  each  acknowledge  that  they  signed,  sealed  and  delivered  the 
same  as  their  voluntary  act  and  deed. 

JOHN  H.  WILSON, 
Master  in  Chancery  of  New  Jersey. 

The  certificate  of  incorporation  must  be  personally  signed 
and  sealed  by  all  the  subscribers  to  the  capital  stock  who  are 
named  in  the  instrument  and  must  then  be  acknowledged  by 
them  before  any  officer  qualified  under  the  New  Jersey  laws 
to  take  acknowledgments  for  deeds  of  real  estate.  For  the 
procedure  as  to  filing  see  Section  23,  Chapter  II.  The  following 
table  gives  the  fees  and  taxes  in  New  Jersey : 


TABLE  OF  FEES  AND  TAXES. 


CAPITAL 
STOCK. 

ORGANIZATION 
FEE. 

SUNDRY  FEES. 

TOTAL. 

ANNUAL 
TAX. 

$5,000 

$25  oo 

$IO  OO 

$35  oo 

$5  oo 

IO.OOO 

25  oo 

IO  OO 

35  oo 

IO  OO 

SO.OOO 

25  oo 

10  00 

35  oo 

50  oo 

IOO.OOO 

25  oo 

IO  OO 

35  oo 

IOO  OO 

I,OOO,OOO 

20O  OO 

IO  00 

2IO  OO 

1,000  oo 

The  state  organization  fee  is  20  cents  on  each  thousand 
dollars  of  capitalization,  but  in  no  case  less  than  the  minimum 
of  $25.  The  annual  tax  on  all  issued  and  outstanding  stock 
up  to  $3,000,000  is  one-tenth  of  one  per  cent.  On  all  stock  in 
excess  of  $3,000,000  and  not  exceeding  $5,000,000  the  rate 
is  one-twentieth  of  one  per  cent,  per  annum.  On  all  stock  in 
excess  of  $5,000,000  the  rate  of  tax  is  fifty  dollars  per  annum 
on  each  million  dollars  or  part  thereof.  Manufacturing  and 
mining  corporations  employing  not  less  than  one-half  of  their 
capital  within  the  state  are  exempt  from  the  annual  tax.  The 
fees  are  somewhat  high  for  the  smaller1  incorporations. 


CHARTER   FORMS.  175 

"  Non-resident "  corporations  are  required  to  maintain  an 
office  in  the  state  with  an  agent  in  charge,  upon  whom  legal 
service  may  be  had.  Individuals  and  companies  in  New  Jersey 
make  a  business  of  maintaining  these  offices  for  non-resident 
corporations,  their  annual  fees  ranging  from  $25  to  $50.  These 
fees  are  not  based  upon  the  capitalization  of  the  companies 
represented,  but  are  purely  arbitrary. 


CHAPTER  XXI. 
BY-LAWS. 


By-laws  are  the  working  rules  of  the  corporation.  They 
are  subordinate  in  authority  to  the  provisions  of  the  charter, 
but  are  superior  to  resolutions  and  motions.  Usually  those 
provisions  of  the  charter  which  apply  more  directly  to  the 
conduct  of  the  corporation  are  brought  into  and  made  part  of 
the  by-laws.  Such  inclusion  does  not  in  any  way  strengthen 
these  provisions,  nor  render  their  observance  more  binding, 
but  is  merely  a  precaution  to  prevent  their  being  overlooked 
and  neglected,  the  charter  being  seldom  referred  to,  while  the 
by-laws  are  supposed  to  be  in  constant  use. 

By-laws  should  be  prepared  and  adapted  to  the  needs  of 
the  particular  corporation  with  the  greatest  care.  Two  sets 
follow,  the  first  a  short  set,  well  adapted  to  the  use  of  small  or 
close  corporations,  where  but  little  formality  is  required;  the 
second,  a  more  complete '  arrangement,  for  the  use  of  those 
corporations  whose  larger  activities  demand  a  more  elaborate 
mechanism  and  more  precise  and  specific  directions  for  its 
operation. 

It  should  be  noted  that  these  more  complete  by-laws  are 
arranged  for  New  Jersey  and  will  need  some  modification 
when  used  in  other  states  (see  Part  II  of  this  work,  for  the 
same  set  of  by-laws  adapted  to  New  York)  ;  also  that  they  do 
not  provide  for  cumulative  voting  (§  54),  nor  for  classification 
of  directors  (§  66).  These  features,  if  desired,  must  be  pro- 
vided for  in  the  certificate  of  incorporation  before  they  can  be 
legally  and  enforceably  included  in  the  by-laws. 

176 


BY-LAWS  177 

Both  the  sets  of  by-laws  given  have  stood  the  test  of  suc- 
cessful use.  They  may  be  easily  modified  to  meet  the  require- 
ments of  any  particular  state  or  company.  (For  full  and  com- 
plete discussion  of  By-laws  see  Part  II  of  this  work). 

Form  21. — By-laws.     Short  Set. 

BY-LAWS 

OF  THE 

COLVILLE    CARBONATE    COMPANY, 
New  York  City. 


ARTICLE  I. — STOCK. 

1.  Certificates  of  Stock  shall  be  issued  in  numerical  order  from  the  stock 
certificate  book,  be  signed  by  the  President  and  Treasurer  and  sealed  by 
the   Secretary   with   the    corporate    seal.     A    record   of   each    certificate 
issued  shall  be  kept  on  the  stub  thereof. 

2.  Transfers  of  Stock  shall  be  made  only  upon  the  books  of  the  Company 
and  before  a  new  certificate  is  issued  the  old  certificate  must  be  surren- 
dered for  cancellation.     The  stock  books  of  the  Company  shall  be  closed 
for  transfers  twenty  days  before  general  elections  and  ten  days  before 
dividend  days. 

3.  The  Treasury  Stock  of  the  Company  shall  consist  of  such  issued  and 
outstanding  stock  of  the  Company  as  may  be  donated  to  the  Company 
or  otherwise  acquired,  and  shall  be  held  subject  to  disposal  by  the  Board 
of  Directors.     Such  stock  shall  neither  vote  nor  participate  in  dividends 
while  held  by  the  Company. 

ARTICLE  II. — STOCKHOLDERS. 

1.  The  Annual  Meeting  of  the  stockholders  of  this  Company  shall  be 
held  in  the  principal  office  of  the  Company  in  New  York  City  at  12  M. 
on  the  second  Monday  in  January  of  each  year,  if  not  a  legal  holiday, 
but  if  a  legal  holiday  then  on  the  day  following. 

2.  Special  Meetings  of  the  stockholders  may  be  called  at  the  principal 
office  of  the  Company  at  any  time  by  resolution  of  the  Board  of  Direct- 
ors, or  upon  written  request  of  stockholders  holding  one-third  of  the 
outstanding  stock. 

3.  Notice  of  Meetings,  written  or  printed,  for  every  regular  or  special 
meeting  of  the  stockholders,  shall  be  prepared  and  mailed  to  the  last 
known  post-office  address  of  each  stockholder  not  less  than  ten  days 
before  any  such  meeting,  and  if  for  a  special  meeting,  such  notice  shall 
state  the  object  or  objects  thereof. 

4.  A   Quorum   at  any  meeting  of  the  stockholders  shall   consist  of  a 
majority  of  the  voting  stock  of  the  Company,  represented  in  person  or 
by  proxy.     A  majority  of  such  quorum  shall  decide  any  question  that 
may  come  before  the  meeting. 

5.  The  Election  of  Directors  shall  be  held  at  the  annual  meeting  of 
stockholders   and   shall,   after  the   first  election,   be  conducted  by  two 

12 


178  CORPORATE  MANAGEMENT. 

inspectors  of  election  appointed  by  the  President  for  that  purpose.  The 
election  shall  be  by  ballot,  and  each  stockholder  of  record  shall  be  enti- 
tled to  cast  one  vote  for  each  share  of  stock  held  by  him. 

6.  The  Order  of  Business  at  the  annual  meeting,  and,  as  far  as  possible, 
at  all  other  meetings  of  the  stockholders,  shall  be: 

1.  Calling  of  Roll. 

2.  Proof  of  due  notice  of  Meeting. 

3.  Reading  and  disposal  of  any  unapproved  Minutes. 

4.  Annual  Reports  of  Officers  and  Committees. 

5.  Election  of  Directors. 

6.  Unfinished   Business. 

7.  New  Business. 

8.  Adjournment.. 

ARTICLE  III. — DIRECTORS. 

1.  The  Business  and  Property  of  the  Company  shall  be  managed  by  a 
Board  of  seven  Directors,  who  shall  be  stockholders  and  who  shall  be 
elected  annually  by  ballot  by  the  stockholders  for  the  term  of  one  year, 
and  shall  serve  until  the  election  and  acceptance  of  their  duly  qualified 
successors.     Any  vacancies  may  be  filled  by  the  Board  for  the  unexpired 
term.     Directors  shall  receive  no  compensation  for  their  services. 

2.  The  Regular  Meetings  of  the  Board  of  Directors  shall  be  held  in  the 
principal  office  of  the  Company  in  New  York  City  at  3  P.  M.  on  the  third 
Tuesday  of  each  month,  if  not  a  legal  holiday,  but  if  a  legal  holiday  then 
on  the  day  following. 

3.  Special  Meetings  of  the  Board  of  Directors  to  be  held  in  the  principal 
office  of  the  Company  in  New  York  City  may  be  called  at  any  time  by 
the  President,  or  by  any  three  members  of  the  Board,  or  may  be  held  at 
any  time  and  place,  without  notice,  by  unanimous  written  consent  of  all 
the  members,  or  by  the  presence  of  all  members  at  such  meeting. 

4.  Notices  of  both  regular  and  special  meetings  shall  be  mailed  by  the 
Secretary  to  each  member  of  the  Board  not  less  than  five  days  before 
any  such  meeting,  and  notices  of  special  meetings  shall  state  the  purposes 
thereof. 

5.  A  Quorum  at  any  meeting  shall  consist  of  a  majority  of  the  entire 
membership  of  the  Board.     A  majority  of  such  quorum  shall  decide  any 
pjestion  that  may  come  before  the  meeting. 

6.  Officers  of  the  Company  shall  be  elected  by  ballot  by  the  Board  of 
Directors  at  their  first  meeting  after  the  election  of  directors  each  year. 
If  any  office  becomes  vacant  during  the  year,  the  Board  of  Directors 
shall  fill  the  same  for  the  unexpired  term.    The  Board  of  Directors  shall 
fix  the  compensation  of  the  officers  and  agents  of  the  Company. 

7.  The  Order  of  Business  at  any  regular  or  special  meeting  of  the  Board 
of  Directors  shall  be: 

1.  Reading  and  disposal  of  any  unapproved  Minutes. 

2.  Reports  of  Officers  and  Committees. 

3.  Unfinished   Business. 

4.  New  Business. 

5.  Adjournment. 

ARTICLE  IV. — OFFICERS. 

i.  The  Officers  of  the  Company  shall  be  a  President,  a  Vice-President, 
a  Secretary  and  a  Treasurer,  who  shall  be  elected  for  one  year  and  shall 
hold  office  until  their  successors  are  elected  and  qualify.  The  positions 
of  Secretary  and  Treasurer  may  be  united  in  one  person. 


BY-LAWS.  179 

2.  The  President  shall  preside  at  all  meetings,  shall  have  general  super- 
vision of  the  affairs  of  the  Company,  shall  sign  or  countersign  all  cer- 
tificates, contracts  and  other  instruments  of  the  Company  as  authorized 
by  the  Board  of  Directors;  shall  make  reports  to  the  directors  and  stock- 
holders and  perform  all  such  other  duties  as  are  incident  to  his  office  or 
are  properly  required  of  him  by  the  Board  of  Directors.     In  the  absence 
or  disability  of  the  President,  the  Vice-President  shall  exercise  all  his 
functions. 

3.  The  Secretary  shall  issue  notices  for  all  meetings,  shall  keep  their 
minutes,  shall  have  charge  of  the  seal  and  the  corporate  books,  shall 
sign  with  the  President  such  instruments  as  require  such  signature,  and 
shall  make  such  reports  and  perform  such  other  duties  as  are  incident  to 
his  office,  or  are  properly  required  of  him  by  the  Board  of  Directors. 

4.  The  Treasurer  shall  have  the  custody  of  all  moneys  and  securities  of 
the  Company  and  shall  keep  regular  books  of  account  and  balance  the 
same   each  month.     He  shall   sign  or  countersign  such  instruments   as 
require  his  signature,  shall  perform  all  duties  incident  to  his  office  or  that 
are  properly  required  of  him  by  the  Board,  and  shall  give  bond  for  the 
faithful  performance  of  his  duties  in  such  sum  and  with  such  sureties  as 
may  be  required  by  the  Board  of  Directors. 

ARTICLE  V. — DIVIDENDS  AND  FINANCE. 

1.  Dividends  shall  be  declared  only  from  the   surplus  profits  at  such 
times  as  the  Board  of  Directors  shall  direct,  and  no  dividend  shall  be 
declared  that  will  impair  the  capital  of  the  Company. 

2.  The  Moneys  of  the  Company  shall  be  deposited  in  the  name  of  the 
Company  in  such  bank  or  trust  company  as  the  Board  of  Directors  shall 
designate,  and  shall  be  drawn  out  only  by  check  signed  by  the  Treasurer 
and  countersigned  by  the  President. 

ARTICLE  VI. — SEAL. 

i.  The  Corporate  Seal  of  the  Company  shall  consist  of  two  concentric 
circles,  between  which  is  the  name  of  the  Company,  and  in  the  centre 
shall  be  inscribed  "  Incorporated  1903,  New  York,"  and  such  seal,  as 
impressed  on  the  margin  hereof,  is  hereby  adopted  as  the  Corporate  Seal 
of  the  Company. 

ARTICLE  VII. — AMENDMENTS. 

1.  These  By-laws  may  be  amended,  repealed  or  altered,  in  whole  or  in 
part,  by  a  majority  vote  of  the  entire  outstanding  stock  of  the  Company, 
at  any  regular  meeting  of  the  stockholders,  or  at  any  special  meeting 
where  such  action  has  been  announced  in  the  call  and  notice  of  such 
meeting.   . 

2.  The  Board  of  Directors  may  adopt  additional  by-laws  in  harmony 
therewith,  but  shall   not  alter  nor  repeal  any  by-laws  adopted  by  the 
stockholders  of  the  Company. 


I  hereby  certify  that  the  foregoing  are  the  By-laws  of  the  Colville 
Carbonate  Company  adopted  by  the  stockholders  thereof  duly  assembled 
in  their  first  meeting,  on  the  Qth  day  of  March,  1903,  at  the  office  of  the 
Company,  No.  170  Broadway,  New  York  City. 

In  Testimony  Whereof,  I  have  hereunto  affixed  my  official 
signature  and  the  corporate  seal  of  said  corporation  on 
this  loth  day  of  March,  1903. 

j  CORPORATE  }  CHARLES  E.  WARREN, 

(      SEAL.      ]  Secretary. 


180  CORPORATE  MANAGEMENT. 

The  foregoing  by-laws  may  be  adapted  to  the  use  of  a  New 
Jersey  corporation  by  a  few  changes  and  additions.  In  Sec- 
tion 5  of  Article  II  the  phrase  "  after  the  first  election  "  should 
be  omitted,  as  the  New  York  provision  that  the  first  election 
shall  be  conducted  by  inspectors  appointed  by  the  board  of 
directors  named  in  the  certificate  of  incorporation  does  not 
obtain  in  New  Jersey.  At  the  end  of  the  section  mentioned 
should  be  added  the  following  provision : 

"  No  person  who  is  a  candidate  for  the  office  of  Director  shall 
act  as  inspector  of  such  election." 

Also  Sections  2  and  3  of  Article  III,  should  be  modified,  if 
meetings  of  the  directors  are  to  be  held  outside  the  State. 
This  right  is  not  allowed  by  the  New  York  statutes,  but  is 
expressly  permitted  by  the  New  Jersey  laws,  "  if  the  by-laws 
or  certificate  of  incorporation  so  provide."  The  directors 
may  be  given  the  right  to  designate  their  own  place  of  meet- 
ing, but,  generally,  the  regular  place  of  meeting  is  fixed  by 
the  by-laws.  If  these  regular  meetings  of  the  directors  of  a 
New  Jersey  corporation  were  to  be  held  in  the  Albany  office 
of  the  company,  Sections  2  and  3  of  Article  III  in  the  fore- 
going by-laws  would  read  as  follows : 

"2.  The  Regular  Meetings  of  the  Board  of  Directors  shall  be 
held  in  the  office  of  the  Company  in  Albany,  New  York,  at  3  p.  M. 
on  the  third  Tuesday  of  each  month. 

"  3-  Special  Meetings  of  the  Board  may  be  called  to  meet  in  the 
Albany  office  of  the  Company  at  any  time,"  etc. 

Also,  if  not  provided  in  the  charter,  or  in  any  event,  a  pro- 
vision should  be  inserted  in  the  by-laws,  giving  the  directors 
authority  to  maintain  offices  outside  the  State  of  New  Jersey. 
Such  provision  would  come  into  Article  III  as  Section  7,  the 
"  Order  of  Business  "  becoming  Section  8,  and  would  read 
about  as  follows: 

"7.  Offices  of  the  Company  may  be  opened  and  maintained  and 
the  books  of  the  Company,  save  the  stock  and  transfer  books,  kept 
therein,  in  such  place  or  places,  within  or  without  the  State  of  New 
Jersey,  designated  by  the  Board  of  Directors,  as  may  in  the  discretion 
of  the  Board  be  necessary  for  the  transaction  of  the  business  of  the 
Company." 


BY-LAWS.  181 

In  Article  V,  "  Dividends  and  Finance,"  a  section  should 
be  added  to  show  clearly  that  the  directors  have  full  power  to 
reserve  such  funds  as  may  be  necessary  before  declaring  divi- 
dends. Unless  otherwise  provided  the  directors  must,  under 
the  New  Jersey  laws,  declare  all  surplus  profits  as  dividends. 
This  section  would  come  into  Article  V  as  Section  I,  "  Divi- 
dends "  becoming  Section  2,  and  "The  Moneys  of  the  Com- 
pany "  becoming  Section  3,  and  might  read  as  follows : 

"  I.  A  Working  Capital  of  such  amount  as  may,  in  the  judgment 
of  the  Board  of  Directors  be  necessary  or  advisable,  shall  be  set 
aside  from  surplus  profits  each  year  before  any  dividends  are  de- 
clared therefrom,  and  such  working  capital  shall  be  used  for  such 
purpose  or  purposes  connected  with  the  business  of  the  Company  as 
the  Board  may  direct." 

With  the  modifications  and  additions  mentioned,  the  set 
of  by-laws  given  will  conform  to  all  the  requirements  of  the 
New  Jersey  laws. 


Form  22. — By-Laws.     Long  Set. 

BY-LAWS 
OF  THE 

SHAWMUT  COAL  COMPANY. 
Incorporated  under  the  Laws  of  New  Jersey. 


ARTICLE  I. — STOCK. 
SEC.  i.  Certificates  of  Stock 

Each  stockholder  of  the  Company  whose  stock  has  been  paid  for  in 
full. shall  be  entitled  to  a  certificate  or  certificates  showing  the  amount 
of  stock  of  the  Company  standing  on  the  books  in  his  name.  Each  cer- 
tificate shall  be  numbered,  bear  the  signatures  of  the  President  and 
Treasurer  and  the  seal  of  the  Company,  and  be  issued  in  numerical  order 
from  the  stock  certificate  book.  A  full  record  of  each  certificate  of 
stock,  as  issued,  must  be  entered  on  the  corresponding  stub  of  the  stock 
certificate  book. 

SEC.  2.  Transfers  of  Stock. 

Transfers  of  stock  shall  be  made  upon  the  proper  stock  books  of  the 
Company,  and  must  be  accompanied  by  the  surrender  of  the  duly  en- 
dorsed certificate  or  certificates  representing  the  transferred  stock. 
Surrendered  certificates  shall  be  canceled  and  attached  to  the  correspond- 
ing stubs  in  the  stock  certificate  book  and  new  certificates  issued  to  the 


182  CORPORATE  MANAGEMENT. 

parties  entitled  thereto.  The  stock  books  shall  be  closed  to  transfers 
twenty  days  before  general  elections  and  twenty  days  before  dividend 
days. 

SEC.  3.  Lost  Certificates. 

The  Board  of  Directors  may  order  a  new  certificate,  or  certificates, 
of  stock  to  be  issued  in  the  place  of  any  certificate  or  certificates  of  the 
Company  alleged  to  have  been  lost  or  destroyed,  but  in  every  such  case 
the  owner  of  the  lost  certificate  or  certificates  shall  first  cause  to  be 
given  to  the  Company  a  bond  in  such  sum,  not  less  than  the  par  value 
of  such  lost  or  destroyed  certificate  or  certificates  of  stock,  as  said  Board 
may  direct,  as  indemnity  against  any  loss  or  claim  that  the  Company 
may  incur  by  reason  of  such  issuance  of  stock  certificates ;  but  the  Board 
of  Directors  may,  in  their  discretion,  refuse  to  replace  any  lost  certifi- 
cate, save  upon  the  order  of  some  court  having  jurisdiction  in  such 
matter. 

SEC.  4.  Stock  and  Transfer  Books. 

The  stock  and  transfer  books  of  the  Company  shall  be  kept  in  its 
principal  office,  No.  525  Main  Street,  East  Orange,  New  Jersey,  and 
shall  be  open  during  business  hours  to  the  inspection  of  any  stockholder 
of  the  Company.  All  other  books  and  records  of  the  Company  shall  be 
kept  in  its  office,  in  New  York  City,  and  shall  include  a  stock  book 
which  shall  be  open  during  business  hours  to  the  inspection  of  any 
stockholder  or  judgment  creditor  of  the  Company. 

SEC.  5.  Preferred  Stock. 

The  capital  stock  of  this  Company  shall  be  One  Hundred  Thousand 
Dollars,  consisting  of  One  Thousand  Shares,  each  of  the  par  value  of 
One  Hundred  Dollars.  Of  these,  Five  Hundred  Shares  shall  be  pre- 
ferred stock,  and  Five  Hundred  Shares  shall  be  common  stock. 

Said  preferred  stock  shall  receive  from  the  net  earnings  of  the  Com- 
pany a  six  per  cent.,  annual,  cumulative  dividend  before  any  dividends 
are  paid  upon  the  common  stock,  but  such  stock  shall  not  entitle  the 
holders  thereof  to  vote  at  the  meetings  of  the  stockholders  of  the  Com- 
pany. 

SEC.  6.  Treasury  Stock. 

All  issued  and  outstanding  stock  of  the  Company  that  may  be  donated 
to,  or  be  purchased  by,  the  Company,  shall  be  treasury  stock  and  shall 
be  held  subject  to  disposal  by  the  action  of  the  Board  of  Directors. 
Such  stock  shall  neither  vote  nor  participate  in  dividends  while  held  by 
the  Company. 

ARTICLE  II. — STOCKHOLDERS. 
SEC.  I.  Annual  Meetings. 

The  regular  annual  meetings  of  the  stockholders  shall  be  held  in  the 
office  of  the  Company  at  No.  525  Main  Street,  East  Orange,  New  Jersey, 
at  12  M.  on  the  second  Monday  of  January  in  each  year,  if  not  a  legal 
holiday,  but  if  a  legal  holiday  then  on  the  day  following.  At  this  meet- 
ing the  directors  for  the  ensuing  year  shall  be  elected,  the  officers  of  the 
Company  shall  present  their  annual  reports,  and  the  Secretary  shall 
have  on  file  for  inspection  and  reference  an  alphabetical  list  of  the  stock- 
holders, giving  the  amount  of  stock  held  by  each  as  shown  by  the  stock 


BY-LAWS.  183 

books  of  the  Company  twenty  days  before  the  date  of  such  annual  meet- 
ing. 

SEC.  2.  Special  Meetings. 

Special  meetings  of  the  stockholders  may  be  held  at  any  time  in  the 
office  of  the  Company,  pursuant  to  a  resolution  of  the  Board  of  Direc- 
tors, or  by  a  call  signed  by  stockholders  holding  a  majority  of  the  voting 
stock  of  the  Company.  Calls  for  special  meetings  shall  specify  the  time, 
place  and  object  or  objects  thereof,  and  no  other  business  than  that  specified 
in  the  call  shall  be  considered  at  any  such  meeting. 

SEC.  3.  Notice  of  Meetings. 

A  written  or  printed  notice  of  every  regular  or  special  meeting  of  the 
stockholders,  stating  the  time  and  place,  and  in  case  of  special  meetings, 
the  objects  thereof,  shall  be  prepared  and  mailed  by  the  Secretary, 
postage  prepaid,  to  the  last  known  post-office  address  of  each  stock- 
holder, at  least  ten  days  before  the  date  of  any  such  meeting. 

SEC.  4.  Voting. 

Only  stockholders  of  record  shall  be  entitled  to  vote  at  the  regular 
and  special  meetings  of  stockholders.  At  such  meetings  each  stock- 
holder shall  be  entitled  to  one  vote  for  each  share  of  stock  held  in  his 
name. 

SEC.  5.  Election  of  Directors. 

At  the  first  meeting  of  the  stockholders  a  Board  of  seven  Directors 
shall  be  elected,  who  shall  serve  until  the  election  and  acceptance  of 
their  duly  qualified  successors.  Thereafter  at  each  annual  meeting  of 
the  stockholders  of  the  Company  seven  Directors  shall  be  elected,  who 
shall  serve  until  the  election  and  acceptance  of  their  duly  qualified  suc- 
cessors. All  elections  for  directors  shall  be  by  ballot,  and  the  candidates, 
to  the  number  to  be  elected,  receiving  the  highest  number  of  votes  shall 
be  declared  elected. 

If  for  any  reason  directors  are  not  elected  at  the  regular  meeting  of 
stockholders,  a  special  meeting  shall  be  called  for  the  purpose  within 
thirty  days  thereafter,  at  which  directors  shall  be  elected  in  all  respects 
as  at  the  annual  meeting. 

Two  inspectors  of  election  shall  be  appointed  by  the  President  to 
conduct  the  election  of  directors  to  serve  for  the  ensuing  year.  These 
inspectors  shall  be  sworn  to  the  faithful  discharge  of  their  duty,  and 
shall  then  take  charge  of  the  election.  No  person  who  is  a  candidate 
for  the  office  of  director  shall  act  as  an  inspector  of  election. 

SEC.  6.  Quorum. 

A  majority  of  the  outstanding  stock,  exclusive  of  treasury  stock,  shall 
be  necessary  to  constitute  a  quorum  at  meetings  of  stockholders.  When 
a  quorum  is  present  at  any  meeting,  a  majority  of  the  stock  represented 
thereat  shall  decide  any  question  brought  before  such  meeting.  In  the 
absence  of  a  quorum,  those  present  may  adjourn  the  meeting  from  day 
to  day,  but  until  a  quorum  is  secured  may  transact  no  business. 

SEC.  7.  Proxies. 

.Any  stockholder  entitled  to  vote  may  be  represented  at  any  regular  or 
special  meeting  of  stockholders  by  a  duly  executed  proxy.  Proxies  shall 
be  in  writing  and  properly  signed,  but  shall  require  no  other  attestation. 


184  CORP  'RATE  MANAGEMENT. 

No  proxy  shall  be  recognized  unless  executed  within  eleven  months  of  the 
date  of  the  meeting  at  which  it  is  presented. 

SEC.  8.  Officers  of  Meetings. 

The  President,  if  present,  shall  preside  at  all  meetings  of  the  stock- 
holders. In  his  absence,  the  next  officer  in  due  order  who  may  be 
present  shall  preside.  For  the  purposes  of  these  by-laws,  the  due  order 
of  officers  shall  be  as  follows :  President,  Vice-President  and  Treasurer. 

The  Secretary  of  the  Company  shall  keep  a  faithful  record  of  the 
proceedings  of  all  stockholders'  meetings. 

SEC.  9.  Order  of  Business. 

The  order  of  business  at  the  annual  meeting  and,  so  far  as  practicable, 
at  all  other  meetings  of  the  stockholders  shall  be  as  follows: 

1.  Calling  of  Roll. 

2.  Proof  of  due  notice  of  Meeting. 

3.  Reading  and  disposal  of  any  unapproved  Minutes. 

4.  Annual  Reports  of  Officers  and  Committees. 

5.  Election  of  Directors. 

6.  Unfinished  Business. 

7.  New  Business. 

8.  Adjournment. 

ARTICLE  III. — DIRECTORS. 
SEC.  i.  Number  and  Authority. 

A  Board  of  seven  Directors  shall  be  elected,  who  shall  have  entire 
charge  of  the  property,  interests,  business  and  transactions  of  the  Com- 
pany, with  full  power  and  authority  to  manage  and  conduct  the  same. 

SEC.  2.  Qualifications. 

No  person  shall  be  elected,  nor  shall  be  competent  to  act  as  a  director 
of  this  Company,  unless  he  is  at  the  time  of  election  the  holder  of  record 
of  at  least  one  share  of  its  stock.  At  least  one  of  the  directors  of  the 
Company  must  be  resident  in  the  State  of  New  Jersey. 

SEC.  3.  Vacancies. 

Any  vacancy  occurring  in  the  Board  of  Directors  may  be  filled  for 
the  unexpired  term  by  a  majority  vote  of  the  remaining  members.  In 
event  of  the  membership  of  the  Board  falling  below  the  number  neces- 
sary for  a  quorum,  a  special  meeting  of  the  stockholders  shall  be  called 
and  such  number  of  directors  shall  be  elected  thereat  as  may  be  neces- 
sary to  restore  the  membership  of  the  Board  to  its  full  number. 

SEC.  4.  Regular  Meetings. 

The  regular  meetings  of  the  Board  of  Directors  shall  be  held  in  the 
office  of  the  Company,  in  the  City  of  New  York,  at  3  P.  M.,  on  the  sec- 
ond Monday  of  each  month,  if  not  a  legal  holiday,  but  if  a  legal  holiday, 
then  on  the  day  following. 

SEC.  5.  Special  Meetings. 

Special  meetings  of  the  Board  of  Directors  may  be  held  at  any  time 
in  the  office  of  the  Company,  in  the  City  of  New  York,  on  the  written 
call  of  the  President  or  of  any  three  members  of  the  Board.  Special 


BY-LAWS.  185 

meetings  may  be  held  at  any  time  and  place,  and  without  notice,  by  unan- 
imous consent  of  the  Board. 

SEC.  6.  Notice  of  Meetings. 

The  Secretary  shall  notify  each  member  of  the  Board  of  all  regular  or 
special  meetings,  by  mailing  to  each  member's  last  known  post-office 
address,  postage  prepaid,  at  least  five  days  before  any  such  meeting,  a 
written  or  printed  notice  thereof,  giving  the  time,  place,  and,  in  case  of 
special  meetings,  the  objects  thereof;  and  no  other  business  shall  be 
considered  at  any  such  meeting  than  shall  have  been  so  notified  to  the 
members. 

SEC.  7.  Quorum. 

A  majority  of  the  Board  of  Directors  shall  constitute  a  quorum,  and 
a  majority  vote  of  the  members  in  attendance  at  any  Board  meeting 
shall,  in  the  presence  of  a  quorum,  decide  its  action.  A  minority  of  the 
Board  present  at  any  regular  or  special  meeting  may,  in  the  absence 
of  a  quorum,  adjourn  to  a  later  date,  but  may  not  transact  any  business 
until  a  quorum  has  been  secured. 

SEC.  8.  Election  of  Officers. 

At  the  first  meeting  of  the  Board  of  Directors  after  the  election  of 
directors  each  year  a  President,  Vice-President,  Secretary,  Treasurer, 
General  Manager,  and  Counsel,  shall  be  elected  to  serve  for  the  ensuing 
year  and  until  the  election  of  their  respective  successors.  Election  shall 
be  by  ballot,  and  a  majority  of  the  votes  cast  shall  be  necessary  to  elect. 
If  not  detrimental  to  the  business  or  operations  of  the  Company,  any 
two  offices  may  be  conferred  upon  one  person.  The  directors  shall  fix 
the  compensation  of  officers,  subject  to  the  limitations  of  the  Charter 
and  the  By-laws.  Any  vacancies  that  occur  may  be  filled  by  the  Board 
for  the  unexpired  term.  The  Board  shall  have  the  right  to  remove  any 
officer  for  cause  by  a  two-thirds  vote  of  the  entire  membership  of  the 
Board. 

SEC.  9.  Compensation  of  Directors. 

Each  director  shall  receive  the  sum  of  five  dollars  as  compensation 
for  his  attendance  at  any  regular  or  special  meeting  of  the  Board  of 
Directors,  and  shall  receive  no  other  salary  or  compensation  for  his 
services  as  a  director  of  the  Company. 

SEC.  10.  Power  to  Pass  By-laws. 

The  Board  of  Directors  shall  have  no  power  to  amend,  alter  or  repeal 
the  by-laws,  but  may  pass  such  additional  by-laws  in  conformity  there- 
with as  may  be  necessary  or  convenient  to  facilitate  the  business  of  the 
Company. 

SEC.  IT.  Executive  Committee. 

The  President,  Vice-President  and  Treasurer  shall  together  consti- 
tute an  Executive  Committee  which  shall  be  a  part  of  the  permanent 
executive  organization  of  the  Company,  and  shall,  in  the  interim  be- 
tween meetings,  of  the  Board  of  Directors,  exercise  all  the  powers  of 
that  body  in  accordance  with  the  general  policy  of  the  Company  and  the 
directions  of  the  Board. 

Meetings  of  the  Executive  Committee  shall  be  held  on  calj  of  the 
President,  or  of  any  two  members  of  the  Committee.  All  of  the  mem- 
bers of  the  Committee  must  be  duly  notified  of  meetings,  and  a  majority 


186  CORPORATE  MANAGEMENT. 

of  the  members  shall  constitute  a  quorum.  The  Executive  Committee 
shall  keep  due  record  of  all  meetings  and  actions  of  the  Committee, 
and  such  records  shall  at  all  times  be  open  to  the  inspection  of  any 
director. 

SEC.  12.  Corporation  Offices. 

The  principal  office  of  the  Company,  within  the  State  of  New  Jersey, 
shall  be  at  525  Main  Street,  East  Orange,  and  the  agent  therein  and  in 
charge  thereof  upon  whom  process  may  be  served  shall  be  the  Registra- 
tion and  Trust  Company.  An  office  shall  also  be  maintained  in  New 
York  City,  and  such  other  offices  for  the  transaction  of  its  business  shall 
be  maintained  at  such  other  places,  in  or  outside  of  said  State,  as  may 
be  determined  upon  by  the  Board  of  Directors. 

SEC.  13.  Order  of  Business. 

The  regular  order  of  business  at  meetings  of  the  Board  of  Directors 
shall  be  as  follows. 

1.  Reading  and  disposal  of  any  unapproved  Minutes. 

2.  Reports  of  Officers  and  Committees. 

3.  Unfinished  business. 

4.  New  Business. 

5.  Adjournment. 

ARTICLE  IV. — OFFICERS. 
SEC.  i.  Enumeration,  Election  and  Qualifications. 

The  officers  of  the  Company  shall  be  a  President,  Vice-President, 
Treasurer,  Secretary,  General  Manager,  and  Counsel.  These  officers 
shall  be  elected  by  the  Board  of  Directors  at  the  first  regular  meeting 
after  the  election  of  directors  each  year,  and  shall  hold  office  for  the  term 
of  one  year,  and  until  their  respective  successors  are  duly  elected  and 
qualify.  The  President  and  Vice-President  shall  be  elected  from  among 
the  Board  of  Directors. 

SEC.  2.  The  President. 

The  President,  when  present,  shall  preside  at  all  meetings  of  the 
stockholders  and  of  the  Board  of  Directors;  shall  sign  all  certificates  of 
stock;  shall  sign  or  countersign,  as  may  be  necessary,  all  such  bills, 
notes,  checks,  contracts  and  other  instruments  as  may  pertain  to  the  or- 
dinary course  of  the  Company's  business;  and  sign,  when  duly  authorized 
thereto,  all  contracts,  orders,  deeds,  liens,  licenses  and  other  instru- 
ments of  a  special  nature. 

He  may  also,  in  the  absence  or  disability  of  the  Treasurer,  endorse 
checks,  drafts  and  other  negotiable  instruments  for  deposit  or  collection, 
and  shall,  with  the  Secretary,  sign  the  minutes  of  all  meetings  over 
which  he  may  have  presided. 

At  the  first  regular  meeting  of  the  Board  in  January  he  shall  submit 
a  complete  report  of  the  operation  of  the  Company  for  the  preceding 
year,  together  with  a  statement  of  the  Company  affairs  as  existing  at 
the  close  of  such  year,  and  shall  submit  a  similar  report  at  the  annual 
meeting  of  stockholders;  also,  he  shall  report  to  the  Board  of  Directors, 
from  time  to  time,  all  sucn  matters  coming  within  his  notice  and  relating 
to  the  interests  of  the  Company,  as  should  be  brought  to  the  attention 
of  the  Board. 

He  shall  be,  ex-officio,  a  member  of  all  standing  committees,  shall  have 
such  usual  powers  of  supervision  and  management  as  may  pertain  to  the 


BV-LAWS.  187 

office  of  President,  and  perform  such  other  duties  as  may  be  properly 
required  of  him  by  the  Board  of  Directors. 

SEC.  3.  The  Vice-President. 

The  Vice-President  shall  familiarize  himself  with  the  affairs  of  the 
Company,  and,  in  the  absence,  disability  or  refusal  to  act  of  the  Presi- 
dent, shall  possess  all  of  the  powers  and  perform  all  of  the  duties  of 
that  officer. 

SEC.  4.  The  Secretary. 

The  Secretary  shall  keep  full  minutes  of  all  meetings  of  the  stock- 
holders and  of  the  Board  of  Directors;  shall  read  such  minutes  at  the 
proper  subsequent  meetings;  shall  issue  all  calls  for  meetings  and  notify 
all  officers  and  directors  of  their  election;  shall  have  charge  of,  and  keep, 
the  seal  of  the  corporation,  and  affix  the  same  to  certificates  of  stock 
when  such  certificates  are  signed  by  the  President  and  Treasurer,  and 
shall  affix  the  seal  attested  by  his  signature,  to  such  other  instruments 
as  may  require  the  same. 

He  shall  keep  the  stock  certificate  book  and  the  other  usual  corpora- 
tion books,  and  shall  prepare,  record,  transfer,  issue,  seal  and  cancel 
certificates  of  stock  as  required  by  the  transactions  of  the  Company  and 
its  stockholders.  He  shall  also  sign,  with  the  President,  all  contracts, 
deeds,  licenses  and  other  instruments  when  so  ordered. 

He  shall  make  such  reports  to  the  Board  of  Directors  as  they  may 
request,  and  shall  also  prepare  such  reports  and  statements  as  are  re- 
quired by  the  State  laws.  He  shall  make  out,  twenty  days  before  any 
election  of  directors,  a  complete  list  of  the  stockholders  entitled  to  vote 
at  such  election,  arranged  in  alphabetical  order,  and  giving  the  number 
of  shares  of  stock  that  may  be  voted  by  each,  and  shall  keep  the  same 
open  to  inspection  at  the  office  of  the  Company  until  the  time  of.  and 
during,  the  said  election.  He  shall  allow  any  stockholder,  on  application 
in  business  hours,  to  inspect  the  stock  certificate  book,  the  stock  transfer 
book  and  the  stock  ledger. 

He  shall  attend  to  such  correspondence,  and  to  such  other  duties,  as 
may  be  incidental  to  his  office,  or  properly  be  assigned  him  by  the 
Board. 

He  shall  receive  such  salary,  not  exceeding  twelve  hundred  dollars 
per  annum,  as  may  be  fixed  by  the  Board  of  Directors. 

SEC.  5.  The  Treasurer. 

The  Treasurer  shall  have  the  custody  of,  and  be  responsible  for,  all 
moneys  and  securities  of  the  Company;  shall  keep  full  and  accurate 
records  and  accounts  in  books  belonging  to  the  Company,  showing  the 
transactions  of  the  Company,  its  accounts,  liabilities  and  financial  con- 
tion,  and  shall  see  that  all  expenditures  are  duly  authorized  and  are 
evidenced  by  proper  receipts  and  vouchers.  He  shall  deposit  in  the 
name  of  the  Company,  in  such  depository  or  depositories  as  are  desig- 
nated by  the  Directors,  all  moneys  that  may  come  into  his  hands  for 
the  Company  account.  His  books  and  accounts  shall  be  open  at  all 
times  during  business  hours  to  the  inspection  of  any  director  of  the 
Company. 

The  Treasurer  shall  also  endorse  for  collection  or  deposit  all  bills, 
notes,  checks  and  other  negotiable  instruments  of  the  Company;  shall 
pay  out  money  as  may  be  necessary  in  the  transactions  of  the  Company, 
either  by  special  or  general  direction  of  the  Board  of  Directors,  and  on 
checks  signed  by  the  President  and  himself,  and  shall  generally,  together 
with  the  President,  have  supervision  of  the  finances  of  the  Company. 


188  CORPORATE   MANAGEMENT. 

He  shall  also  make  a  full  report  of  the  financial  condition  of  the 
Company  for  the  annual  meeting  of  the^  stockholders,  and  shall  make 
such  other  reports  and  statements  as  may  be  required  of  him  by  the 
Board  of  Directors  or  by  the  laws  of  the  State. 

He  shall  give  bond  in  the  sum  of  five  thousand  dollars,  with  sureties 
satisfactory  to  the  Board  of  Directors,  for  the  faithful  performance  of 
his  duties  and  for  the  restoration  to  the  Company  in  event  of  his  death, 
resignation  or  removal  from  office,  of  all  books,  papers,  vouchers, 
money  and  other  property  belonging  to  the  Company  that  may  have 
come  into  his  custody.  He  shall  receive  such  compensation,  not  ex- 
ceeding eighteen  hundred  dollars  per  annum,  as  may  be  fixed  by  the 
Board  of  Directors. 

SEC.  6.  The  General  Manager. 

The  General  Manager  shall,  under  the  supervision  of  the  Board  of 
Directors  and  the  President,  have  charge  of  and  manage  the  active 
business  operations  of  the  Company.  He  shall  perform  such  further 
duties  and  make  such  reports  as  may  be  required  of  him  by  the  Board 
of  Directors,  and  shall  receive  such  salary,  not  exceeding  twenty-four 
hundred  dollars  per  annum,  as  may  be  fixed  by  the  Board. 

SEC.  7.  Counsel. 

Counsel  of  the  Company  shall  prepare  all  such  contracts  and  agree- 
ments required  in  the  business  of  the  Company  as  may  be  referred  to 
him  by  its  officers;  and  shall  inspect  and  pass  upon  all  such  instruments 
presented  to  the  Company  as  may  be  of  sufficient  importance  to  justify 
such  examination;  also  he  shall  advise  with  the  officers  of  the  Company 
in  all  such  legal  matters  pertaining  to  the  affairs  of  the  Company  as 
may  require  his  consideration.  He  shall  receive  such  annual  retainer, 
not  exceeding  six  hundred  dollars  per  annum,  as  may  be  fixed  by  the 
Board  of  Directors. 


ARTICLE  V. — DIVIDENDS  AND  FINANCES. 
SEC.  i.  Dividends. 

Dividends  shall  be  declared  at  such  times  as  the  Board  may  direct, 
but  no  dividend  shall  be  declared  or  paid,  save  from  surplus  profits  re- 
maining after  all  current  liabilities  of  the  Company  have  been  fully  paid; 
nor  shall  any  dividend  be  declared  that  would  impair  the  capital  of  the 
Company. 

SEC.  2.  Reserve  Fund. 

No  dividend  to  exceed  six  per  cent,  per  annum  shall  be  declared  by 
the  Board  of  Directors  until  there  shall  have  been  accumulated  from 
surplus  profits  a  reserve  fund  of  ten  thousand  dollars,  such  fund  to  be 
used  for  the  extension  or  enlargement  of  the  business  of  the  Company 
and  the  betterment  of  its  plant,  or  for  such  other  purposes  as  may  be 
necessary  or  advisable. 

SEC.  3.  Debt. 

No  debt  shall  be  contracted,  nor  liability  incurred,  nor  contract  made 
by  or  on  behalf  of  this  Company  in  excess  of  one  thousand  dollars, 
unless  the  same  be  authorized  or  directed  by  the  By-laws  or  by  a  duly 
recorded  two-thirds  vote  of  the  entire  Board  of  Directors  at  a  regular 
meeting,  or  at  a  special  meeting  called  for  the  purpose. 


BY-LAWS.  189 

SEC.  4.  Bank  Deposits. 

The  Treasurer  shall  deposit  the  moneys  of  the  Company  as  the  same 
may  come  into  his  hands,  in  such  depository  or  depositories  as  may  be 
designated  by  the  Board  of  Directors,  and  such  deposits  shall  be  made 
in  the  name  of  the  Company,  and  moneys  shall  be  withdrawn  therefrom 
only  by  check  signed  by  the  Treasurer  and  countersigned  by  the  Presi- 
dent. 

ARTICLE  VI. — SUNDRY  PROVISIONS. 
SEC.  I.  Corporate  Seal. 

The  corporate  seal  of  the  Company  shall  consist  of  two  concentric 
circles,  between  which  shall  be  the  name  of  the  Company,  and  in  the 
centre  shall  be  inscribed  "  Incorporated  1903,  New  Jersey,"  and  such 
seal,  as  impressed  on  the  margin  hereof,  is  hereby  adopted  as  the  Cor- 
porate seal  of  the  Company. 

SEC.  2.  Penalties. 

Any  officer,  director  or  stockholder  who  shall  disobey  or  violate 
any  of  the  provisions  of  these  by-laws  shall  be  fined  in  an  amount  not  to 
exceed  twenty  dollars,  such  fine  to  be  imposed  by  the  Board  of  Direc- 
tors, and,  if  not  paid  at  the  time,  to  be  deducted  from  any  salary  or 
dividend  then  due  or  that  may  thereafter  become  due  said  person. 

SEC.  3.  Amendment. 

These  by-laws  may  be  amended,  repealed  or  altered,  in  whole  or  in 
part,  at  any  regular  meeting  of  the  stockholders,  or  at  any  special  meet- 
ing where  such  action  has  been  duly  announced  in  the  call,  provided  that 
a  majority  of  the  entire  voting  stock  of  the  Company  shall  vote  for 
such  amendment,  repeal  or  alteration. 

The  Board  of  Directors  shall  have  no  power  to  amend,  alter  or  re- 
peal the  by-laws,  but  may  pass  such  additional  by-laws  in  conformity 
therewith  as  may  be  necessary  or  convenient  to  facilitate  the  business  of 
the  Company. 


In  connection  with  these  by-laws  reference  should  be  made 
to  the  text  in  Part  II  relating  to  each  subject.  There  are  only 
such  trifling  differences  between  the  by-laws  given  here  and 
those  discussed  in  Part  II  as  are  made  necessary  by  the  few 
conflicting  provisions  of  the  New  York  and  New  Jersey  laws. 
The  comments  and  references  are  applicable  to  both  states. 


CHAPTER  XXII. 
PROXIES. 


The  proxy  is  merely  a  special  power  of  attorney.  Given  by 
the  owner  of  stock  it  authorizes  the  party  named  therein  to 
represent  the  owner  at  stockholders'  meetings  of  the  particular 
company.  Proxies  vary  greatly  as  to  formality  and  the  extent 
of  authority  conveyed.  The  forms  which  follow  cover  a  suf- 
ficiently wide  scope  to  meet — -with  suitable  modifications — the 
requirements  of  almost  any  case. 

The  ordinary  proxy  may  be  revoked  by  the  maker  at  any 
time,  even  though  it  specify  in  the  proxy  itself  that  it  is  irre- 
vocable, or  that  it  is  to  extend  or  last  over  a  certain  stated  time 
A  revocation  of  a  proxy  should  be  in  writing  and  be  filed  with 
the  secretary,  though  the  mere  presence  of  the  owner  of  stock 
at  a  meeting,  with  the  expressed  intention  of  voting  his  stock 
thereat,  would  have  the  practical  effect  of  revoking  for  that 
meeting  all  his  outstanding  proxies.  Should  the  owner  of  stock 
issue  a  proxy  while  a  conflicting,  prior  one  is  outstanding,  he 
should  incorporate  in  the  second  proxy  a  revocation  of  the  first. 
Should  he  not  do  so,  the  presentation  of  the  more  recent  proxy 
would  have  the  practical  effect  of  revoking  the  first,  but  the 
absence  of  any  formal  revocation  might  excite  comment  and 
make  trouble. 

A  proxy  limited  to  a  certain  meeting  or  time  expires  and 
ends  with  that  particular  meeting  or  time  without  revocation. 
It  should  be  noted  that  in  many  states  the  life  of  proxies  is 
limited  by  statute. 

A  proxy  given  for  a  particular  meeting  holds  good  for  any 
meeting  adjourned  therefrom,  though  it  is  usual  to  specify  in 

190 


PROXIES.  191 

the  proxy  that  this  is  the  case.  Directors  cannot  give  proxies 
authorizing  others  to  represent  and  vote  for  them  at  directors' 
meetings. 

Proxies  should  be  signed  and  sealed  by  the  maker  and 
witnessed  by  at  least  one  person,  but  do  not  ordinarily  require 
acknowledgment.  Where  proxies  are  given,  as  is  frequently 
done,  merely  to  insure  the  presence  of  a  quorum  at  a  meeting, 
they  are  usually  sent  to  the  secretary,  duly  signed  and  witnessed, 
but  with  the  name  of  the  party  to  act  omitted.  At  the  time  of 
meeting  any  convenient  name  is  filled  in  and  the  proxy  becomes 
effective. 

Blank  proxies,  as  they  are  called  when  the  proxy  is  duly 
executed  but  the  name  of  the  party  appointed  is  omitted,  are 
also  employed  in  any  case  where  the  name  of  the  party  to  act  has 
not  been  definitely  decided  upon,  or  where  it  is  immaterial.  The 
device  is  convenient  and  entirely  legal.  When  once  the  name 
has  been  filled  in,  however,  the  proxy  can  only  be  used  by  the 
specified  party,  nor  can  this  party  authorize  any  one  else  to 
vote  the  stock  covered  by  his  proxy  unless  that  document 
distinctly  confers  upon  him  full  rights  of  substitution.  (See 
Form  25.)  (See  §  56  for  general  subject  of  proxies.)  A 
proxy  may  cover  all  or  any  part  of  the  stock  owned  by  an 
individual,  and  two  or  more  proxies  may  be  given  by  any 
stockholder,  each  proxy  covering  part  of  his  holding. 

Form  23. — Simple  Proxy.     Unlimited. 

PROXY. 

Know  All  Men  By  These  Presents,  That  I,  the  undersigned,  do 
hereby  constitute  and  appoint  George  R.  Ridgway  my  true  and  lawful 
attorney  to  represent  me  at  all  meetings  of  the  stockholders  of  the  Collis 
Machine  Company,  and  for  me  and  in  my  name  and  stead  to  vote  thereat 
upon  the  stock  standing  in  my  name  on  the  books  of  said  Company  at 
the  times  of  said  meetings,  and  I  hereby  grant  my  said  attorney  all  the 
powers  that  I  should  possess  if  personally  present  at  such  meetings 
Witness  my  signature  and  seal  this  loth  day  of  January,  1903. 

In  presence  of  WILLIAM  H.  FALKNER.        [L.  s.] 

HERBERT  S.  WINDOM. 


192  CORPORATE  MANAGEMENT. 

This  proxy  is  short  and  simple  as  to  form,  but  is  somewhat 
broad  in  its  scope.  It  is  unlimited  as  to  time,  and,  until  revoked, 
or  terminated  by  some  statutory  limitation,  applies  to  every 
stockholders'  meeting,  regular,  special  or  adjourned.  It  author- 
izes the  appointee  to  participate  in  any  way  that  any  stockholder 
might  at  such  meetings,  and,  generally,  places  the  appointee  in 
the  position  of  the  owner  of  the  stock  himself  in  reference  to 
any  corporate  action. 


Form  24. — Simple  Proxy.     Time  Limited. 


PROXY. 

Know  All  Men  By  These  Presents,  That  I,  the  undersigned,  do 
hereby  constitute  and  appoint  George  R.  Ridgway  my  true  and  lawful 
attorney  to  represent  me  at  all  meetings  of  the  stockholders  of  the  Collis 
Machine  Company  held  on  or  before  the  isth  day  of  January,  1903,  and, 
for  me  and  in  my  name  and  stead,  to  vote  at  said  meetings  upon  the 
stock  now  standing  in  my  name  on  the  books  of  said  Company,  and  I 
hereby  grant  my  said  attorney  all  the  power  that  I  should  possess  if 
personally  present  at  such  meetings. 

Witness  my  signature  and  seal  this  loth  day  of  January,  1903. 

In  presence  of  WILLIAM  H.  FALKNER.         [L.  s.] 

HERBERT  S.  WINDOM. 


This  proxy  authorizes  the  appointee  to  represent  the  maker 
fully  at  all  corporate  meetings  for  the  specified  term,  but  at 
the  expiration  of  that  time  it  becomes  null  and  void  without 
any  formal  revocation  or  other  action  on  the  part  of  the  maker. 
It  should  be  noted  that  the  wording  of  the  above  proxy  only 
authorizes  the  appointee  to  vote  upon  the  stock  "  now  "  owned 
by  the  maker.  Should  this  latter  acquire  additional  stock  of  the 
company  later  than  January  loth,  1903,  it  would  not  be  covered 
by  this  proxy.  By  substituting  the  word  "  then  "  for  "  now," 
or  by  using  the  wording  of  the  preceding  proxy  (Form  23) 
as  to  this  feature,  all  stock  acquired  prior  to  the  time  of  meet- 
ing would  be  covered. 


PROXIES.  193 

Form  25. — Simple  Proxy.     Particular  Meeting. 

PROXY. 

Know  All  Men  By  These  Presents,  That  I,  the  undersigned,  do 
hereby  constitute  and  appoint  George  R.  Ridgway  my  true  and  lawful 
attorney,  with  full  power  of  substitution  and  revocation,  to  represent 
me  at  the  special  meeting  of  stockholders  of  the  Collis  Machine  Com- 
pany to  be  held  on  the  2Oth  day  of  January,  1903,  at  10  A.  M.,  and,  for  me 
and  in  my  name  and  stead,  to  vote  at  said  meeting,  and  at  any  adjourn- 
ments thereof,  upon  the  stock  standing  in  .my  name  on  the  books  of  said 
Company  upon  which  I  may  be  entitled  to  vote  at  the  date  of  said  meet- 
ing, and  I  hereby  grant  my  said  attorney  all  the  powers  that  I  should 
possess  if  personally  present  at  said  meeting. 

Witness  my  signature  and  seal  this  roth  day  of  January,  1903. 

In  presence  of  WILLIAM  H.  FALKNER.        [L.  s.] 

HERBERT  S.  WINDOM. 

This  proxy  is  limited  to  one  particular  meeting,  but  other- 
wise is  quite  extended  as  to  the  powers  granted.  It  covers  all 
the  stock  now  owned  by  the  maker  or  that  may  be  owned  at 
the  time  of  the  meeting,  and  empowers  the  appointee  to  give 
proxies  to  others  to  vote  such  stock  and  to  revoke  these 
other  proxies  at  will.  If  it  is  desired  to  convey  these  latter 
powers,  the  words  "  with  full  power  of  substitution  and 
revocation  "  should  be  omitted. 

Should  all  of  the  stock  covered  by  a  proxy  be  disposed  of  by 
the  owner  before  the  date  of  meeting,  such  proxy  would  be 
thereby  nullified.  If  part  of  the  stock  were  sold  the  proxy  would 
still  hold  for  the  remaining  stock,  but  would  not  in  any  way 
cover  or  affect  the  stock  that  was  sold. 

Form  26. — Formal  Proxy.     Annual  Meeting. 

PROXY. 

Know  All  Men  By  These  Presents,  That  we,  the  undersigned,  stock- 
holders of  the  American  Steel  Casting  Company,  do  hereby  constitute 
and  appoint  John  W.  Gillett  our  true  and  lawful  attorney,  with  full 
power  of  substitution  and  revocation,  for  us  and  in  our  names,  place  and 
stead,  to  vote  upon  the  stock  then  standing  in  our  respective  names 
upon  the  books  of  said  Company,  at  the  annual  meeting  of  the  stock- 
holders thereof,  to  be  held  in  the  office  of  the  Company,  22  Broad  street, 
New  York  City,  January  loth,  1903,  at  10  A,  M.,  and  at  any  meeting  post- 
poned or  adjourned  therefrom,  hereby  granting  to  our  said  attorney 
full  power  and  authority  to  act  for  us  at  said  meeting,  and,  in  our  names 

13 


194  CORPORATE   MANAGEMENT. 

and  stead,  to  vote  thereat  upon  our  said  stock  in  the  election  of  directors 
and  in  the  transaction  of  such  other  business  as  may  be  brought  before 
the  said  meeting,  all  as  fully  as  we  might  or  could  do  if  personally  pres- 
ent, and  we  hereby  ratify  and  confirm  all  that  our  said  attorney,  or  his 
substitute,  shall  lawfully  do  at  such  meeting  in  our  names,  place  and 
stead. 

In  Witness  Whereof,  we  have  hereunto  affixed  our  signatures 
and  seals  this  5th  day  of  January,  1903. 

WILLIS  H.  EVERETT.        [L.  s.] 
SARGENT  T.  JASPER.         [L.  s.] 

In  presence  of  HENRY  B.  EVANS.  [L.  s.] 

HARRY  B.  JASPER 

as  to  Willis  H.  Everett. 
HENRY  S.  ALLSWORTH 

as  to  Sargent  T.  Jasper 
and  Henry  B.  Evans. 


Where  matters  of  considerable  importance  are  to  be  consid- 
ered and  passed  upon,  and,  under  other  circumstances,  where 
formality  and  a  very  complete  statement  are  desirable,  this 
more  formal  proxy  will  be  found  suitable.  It  does  not  convey 
any  greater  or  more  complete  powers  than  the  shorter  forms 
heretofore  considered,  but  it  is  more  specific  and  more  con- 
ventional, and  will  be  found  more  satisfactory  under  some 
conditions. 


Form  27. — Formal  Proxy.     For  Specific  Action. 


PROXY. 

Whereas,  A  special  meeting  of  the  stockholders  of  the  American 
Steel  Casting  Company  has  been  called  to  meet  at  the  office  of  said 
Company,  No.  22  Broad  Street,  New  York,  at  10  A.  M.,  on  the  igth  day 
of  January,  1903,  at  which  meeting  a  proposition  involving  the  sale  of 
the  entire  manufacturing  property  of  the  said  Company  is  to  be  sub- 
mitted to  the  stockholders  for  their  action,  and 

Whereas,  The  undersigned,  a  stockholder  in  the  said  American  Steel 
Casting  Company,  is  opposed  to  the  said  sale  and  is  desirous  of  having 
the  votes  to  which  he  is  entitled  as  a  stockholder  of  said  Company  cast 
against  such  proposed  sale  of  the  Company's  property, 

Now  Therefore  Be  It  Known,  That  I,  the  undersigned,  do  hereby 
constitute  and  appoint  William  B.  Sherington  my  true  and  lawful  attor- 
ney to  attend  the  said  stockholders'  meeting  and  for  me  and  in  my  name, 
place  and  stead,  to  cast  thereat  the  votes  to  which  I  may  be  entitled  as 
owner  of  the  stock  then  standing  in  my  name  on  the  books  of  the  said 
Company  against  the  proposed  sale  of  the  Company's  manufacturing 
property,  and  I  do  hereby  grant  my  said  attorney  full  power  and  author- 


PROXIES.  195 

ity  to  cast  my  said  votes  against  such  proposed  sale,  and  do  hereby 
ratify  and  confirm  my  said  attorney's  action  in  so  doing. 

In  Witness  Whereof,  I  have  hereunto  affixed  my  signature  and 

seal  this  isth  day  of  January,  1903. 

In  presence  of  ELSWORTH  J.  MORRIS.        [L.  s.] 

JAMES  W.  HAMILTON. 


The  foregoing  proxy  authorizes  the  appointee  to  vote  the 
specified  stock  only  for  the  purpose  indicated  and  at  that  par- 
ticular meeting.  It  gives  no  power  beyond  and  would  not 
authorize  any  other  vote  on  that  stock  or  any  other  action  at 
the  meeting. 

Form  28. — Corporate  Proxy. 

PROXY. 

Know  All  Men  By  These  Presents,  That  the  Kanawha  Gas  Coal 
Company,  a  corporation  organized  under  the  laws  of  the  State  of  West 
Virginia,  owning  and  holding  Three  Hundred  and  Fifty  (35°)  Shares  of 
the  Capital  Stock  of  the  American  Steel  Casting  Company,  of  New 
York  City,  does  hereby  constitute  and  appoint  John  W.  Williams,  of 
30  Broad  Street,  New  York  City,  its  true  and  lawful  attorney  to  attend 
the  annual  meeting  of  the  aforesaid  American  Steel  Casting  Company 
to  be  held  in  the  office  of  that  Company,  No.  22  Broad  Street,  January 
loth,  1903,  at  10  A.  M.,  and  thereat,  for  this  Company  and  in  its  name, 
place  and  stead,  to  vote  upon  the  said  Three  Hundred  and  Fifty  Shares 
of  stock  and  to  do  all  such  other  things  competent  to  a  stockholder,  at 
said  meeting  as,  in  his  judgment,  may  be  necessary  or  advantageous  for 
the  operations  of  the  said  American  Steel  Casting  Company,  or  for  the 
interests  of  this  Company,  and  to  that  end  the  said  Kanawha  Gas  Coal 
Company  does  hereby  grant  to  its  said  attorney  for  said  meeting,  any 
and  all  powers  belonging  or  pertaining  to  this  Company  as  a  stockholder 
of  the  aforesaid  American  Steel  Casting  Company,  hereby  ratifying  and 
confirming  all  that  its  said  attorney  may  lawfully  do  at  said  meeting 
in  the  name,  place  and  stead  of  this  Company. 

In  Witness  Whereof,  the  President  and  Secretary  of  the  said 
Kanawha  Gas  Coal  Company,  duly  authorized  thereunto, 
have  hereunto  affixed  the  official  signature  and  seal  of  their 
said  Company,  all  being  done  in  the  City  of  Wheeling, 
West  Virginia,  on  this  the  2d  day  of  January,  1903. 

KANAWHA  GAS  COAL  COMPANY, 

CORPORATE  )  By  JOHN  T.  WILKINS,  President. 

SEAL,     j  HARVEY  T.  SEAMANS,  Secretary. 


This  form  of  proxy  would  only  be  used  where  the  stock 
owned  by  the  company  was  made  out  in  the  corporate  name. 


196  CORPORATE  MANAGEMENT. 

Often  such  stock  is  made  out  in  the  name  of  the  secretary  or 
treasurer  of  the  company,  as  trustee,  or  in  the  name  of  some 
other  party  as  trustee  for  the  company.  There  is,  however, 
except  where  prohibited  by  state  laws,  no  legal  objection  to 
such  stock  being  held  in  the  company's  name.  The  general 
form  of  a  trustee's  proxy  would  be  as  follows : 


Form  29. — Trustee's  Proxy. 


PROXY. 

Know  All  Men  By  These  Presents,  That  I,  John  H.  Wilston,  holding 
in  my  name  as  Trustee  for  the  Shenandoah  Valley  Coal  Company,  of 
West  Virginia,  One  Hundred  (100)  Shares  of  the  Capital  Stock  of  the 
American  Steel  Casting  Company,  of  New  York  City,  do,  as  Trustee  for 
the  said  Shenandoah  Valley  Coal  Company,  hereby  constitute  and  ap- 
point Henry  W.  James,  of  New  York  City,  my  true  and  lawful  attorney 
to  attend  the  annual  meeting  of  stockholders  of  the  said  American  Steel 
Casting  Company  to  be  held  in  the  office  of  that  Company,  No.  22 
Broad  Street,  New  York  City,  on  the  loth  day  of  January,  1903,  at  10 
A.  M.,  and  for  me  and  in  my  stead,  to  vote  thereat  upon  the  said  One 
Hundred  Shares  of  stock  belonging  to  the  said  Shenandoah  Valley  Coal 
Company,  and  I  hereby  grant  the  said  Henry  W.  James  full  power  and 
authority  to  represent  the  said  stock  at  the  said  meeting  and  to  vote 
thereupon  in  the  election  of  directors  and  in  the  transaction  of  any  other 
business  that  may  be  brought  before  the  said  meeting,  all  as  fully  as  I,  as 
Trustee,  might  myself  do  were  I  personally  present  thereat,  and  I,  as 
Trustee  for  the  said  Shenandoah  Valley  Coal  Company,  do  hereby  ratify 
and  confirm  all  that  the  said  Henry  W.  James  shall  lawfully  do  at  said 
meeting  by  virtue  of  this  present  authority. 

In  Witness  Whereof,  I  have  hereunto  affixed  my  signature,  as 
Trustee  of  the  said  Shenandoah  Valley  Coal  Company,  and 
my  seal,  in  the  City  of  Wheeling,  on  this  the  3d  day  of 
January,  1903. 

JOHN  H.  WILSTON,        [L.  s.] 

In  presence  of  Trustee  for  the  Shenandoah  Valley 

WARREN  DISSTON.  Coal  Company. 


Where  corporate  stock  is  held  in  the  name  of  the  secretary 
or  treasurer,  the  general  form  of  proxy  would  be  as  above.  It 
would  be  signed  by  the  party  himself  with  his  official  title 
affixed,  as  "  John  B.  Earl,  Treasurer,"  and  in  the  body  of  the 
proxy  the  statement  would  be  made  that  the  stock  held  by  him 
was  in  trust  for  his  company. 


PROXIES.  197 

Form  30. — Revocation  of  Proxy. 

REVOCATION  OF  PROXY. 

I,  the  undersigned,  do  hereby  revoke  and  annul  any  and  all  proxies  or 
powers  of  attorney  heretofore  given  by  me,  as  far  as  the  same  may 
authorize  or  empower  any  person  or  persons  to  represent  me,  vote  in 
my  name  and  stead,  or  act  for  me  in  any  way  whatsoever,  at  any-  meeting 
or  meetings  of  the  stockholders  of  the  Chilton  Plow  Company. 

Witness  my  signature  and  seal  this  5th  day  of  June,  1903. 
In  presence  of  SAMUEL  B.  SERRELL.         [L.  s.] 

HAMPTON  B.  BYRNES. 

The  above  revocation  delivered  to  the  secretary  of  the  com- 
pany would  annul  all  outstanding  proxies  for  the  stock  men- 
tioned. If  it  were  desired  to  except  any  particular  proxy  from 
the  general  revocation,  it  should  be  specifically  mentioned,  or 
the  above  revocation  might  be  limited  to  the  one  or  more 
proxies  that  were  to  be  terminated,  and  any  others  then  out- 
standing would  be  unaffected. 


CHAPTER  XXIII. 
MOTIONS. 


In  any  corporate  meeting,  whether  of  stockholders  or  direc- 
tors, anything  obviously  necessary,  such  as  the  approval  of  the 
minutes  of  a  previous  meeting,  or  the  correction  of  a  name  or 
date,  might  be  merely  directed  by  the  president,  and,  in  the 
absence  of  objection  on  the  part  of  those  present,  the  thing  so 
done  would  be  held  to  be  the  action  of  the  meeting.  In  matters 
of  more  importance,  however,  or  where  there  is  any  difference 
of  opinion  as  to  what  had  best  be  done,  a  decision  would  be 
reached,  and  action  taken  by  means  of  either  a  motion  or  reso- 
lution. 

The  motion  is  the  simplest  method  of  formal  corporate 
action.  It  differs  from  the  resolution  in  form,  and,  while  there 
is  no  clear-cut  line  of  separation  between  the  matters  that 
should  be  settled  by  motion,  and  those  that  are  better  disposed 
of  by  resolution,  the  general  rule  holds  good  that  important 
actions  should  be  authorized  by  resolution,  while  matters  of 
minor  importance  may  be  left  for  motions.  (See  Chapter 
XXIV.) 

Motions  are  usually  made  at  the  moment  when  action  is 
required,  and,  in  consequence,  are  not  usually  submitted  in  writ- 
ing. If  the  subject  matter  is  of  importance,  or  it  is  desirable 
that  the  exact  wording  be  preserved,  the  presiding  officer  will 
request  the  maker  of  the  motion  to  put  it  in  writing.  If  the 
motion  is  carried,  this  written  copy  is  turned  over  to  the  sec- 
retary to  be  incorporated  in  his  minutes.  If  the  motion  is  not 
written,  the  secretary  must  exercise  every  care  to  get  the  sense 
of  what  is  intended,  and  follow  the  wording  of  the  maker  as 

198 


MOTIONS.  199 

far  as  practicable.  The  following  forms  of  motions  are  as  they 
would  appear  in  the  secretary's  minutes.  The  form  would  be 
the  same  for  either  stockholders'  or  directors'  meetings. 

Form  31. — To  Receive  and  File  Treasurer's  Report. 


"  Upon  motion  duly  seconded  and  unanimously  carried,  the  Treas- 
urer's Report,  as  read,  was  ordered  received  and  filed." 


The  subject  matter  of  this  motion  being  of  minor  import- 
ance and  action  upon  it  being  unanimous,  the  name  of  the 
maker  is  of  no  importance  and  need  not  be  recorded. 

Form  32. — To  Pay  Bills. 


"  Upon  motion,  duly  made  and  seconded,  and  unanimously  carried, 
the  Treasurer  was  directed  to  pay  the  bills,  as  presented  to  the  meeting, 
for  March  rent  and  salaries." 


Usually  the  secretary  is  left  to  his  discretion  as  to  whether 
the  names  of  the  parties  making  and  seconding  motions  are 
entered,  or  otherwise.  In  the  above  motion,  authorizing  rou- 
tine action  and  concurred  in  by  all,  the  names  are  not  essential. 
In  any  matters  where  there  is  difference  of  opinion,  or  a  likeli- 
hood of  subsequent  discussion  or  trouble,  the  names  should  be 
recorded.  In  matters  of  much  importance  the  vote  is  frequently 
recorded  as  well. 

Form  33. — To  Pay  Disputed  Account. 

"  Mr.  William  Morris  moved  that  the  account  of  the  Shirley-Wilson 
Company  for  supplies  furnished,  aggregating  $235.00,  be  paid  in  full. 
Motion  seconded  by  Mr.  H.  M.  Shepherd  and  carried,  Messrs.  Morris, 
Shepherd  and  McKane  voting  in  the  affirmative  and  Messrs.  Temple 
and  Stanford  voting  in  the  negative." 


200  CORPORATE  MANAGEMENT. 

If,  in  the  case  of  a  specially  complicated  or  important 
motion,  the  maker  were  requested  to  put  it  in  writing,  the  fol- 
lowing form  would  be  suitable : 

Form  34. — To  Purchase  Engines. 


"  Moved,  That  the  President,  Secretary  and  General  Manager  of  this 
Company  fully  investigate  the  claims  of  the  Simplex  Corliss  Automatic 
Engines  represented  by  the  Willis  &  Vrooman  Co.,  and,  if  such  engines 
are  found  materially  more  efficient  under  equal  conditions  than  the 
engines  now  in  use  in  the  shops  of  this  Company,  that  said  officers  be 
hereby  authorized  to  exchange  said  present  engines  for  an  equal  H.  P. 
capacity  of  the  Simplex  Corliss  Engines,  provided  that  the  expenditure 
necessitated  by  such  exchange  shall  not  exceed  the  sum  of  $650.00." 


This  motion  would  be  handed  the  president  by  the  maker 
as  soon  as  written  out,  and  would  be  read  by  that  officer  to  the 
meeting.  If  duly  seconded,  the  motion  would,  after  discussion, 
be  put  to  the  v.ote,  and,  if  carried,  the  written  copy  would  be 
handed  to  the  secretary  for  his  records.  The  secretary 
should  incorporate  such  written  motion  into  his  minutes  with- 
out change  of  any  kind,  prefacing  it  with  the  proper  explanatory 
statement,  as,  "  The  following  motion,  offered  by  Mr.  Brown, 
was  duly  seconded,  and  carried  by  the  unanimous  vote  of  all 
present." 


CHAPTER  XXIV. 
RESOLUTIONS. 


Resolutions  are  the  formal  expression  of  corporate  action 
or  decision.  They  are  more  formal  than  motions,  usually  go 
into  their  subject  matter  more  fully,  and  are  used  for  such 
important  corporate  actions  as  require  a  complete  statement 
and  record.  Resolutions  should  always  be  submitted  in  writ- 
ing, and  should  be  entered  in  the  secretary's  minutes  exactly 
as  adopted.  The  usual  resolutions,  such  as  those  which  imme- 
diately follow,  would  not-  require  any  statement  of  the  exact 
vote,  but  would  be  entered  in  the  minutes,  prefaced  with  the 
requisite  explanatory  remarks ;  as,  for  example,  "  Mr.  Castle- 
ton  presented  the  following  resolution,  which  was  duly  sec- 
onded by  Mr.  Elliott  and  unanimously  adopted." 

Form  35. — To  Open  Bank  Account.     (Directors'.) 


Resolved,  That  the  Treasurer  be  and  hereby  is  authorized  and  in- 
structed to  open  an  account  for  the  Company  with  the  Seaboard  Na- 
tional Bank  of  New  York  City  and  to  deposit  therein  all  funds  of  the 
Company  coming  into  his  custody,  such  account  to  be  in  the  name  of  the 
Company  and  funds  deposited  therein  to  be  withdrawn  only  by  check, 
signed  by  the  Treasurer  and  countersigned  by  the  President. 


Form  36. — To  Authorize  Execution  of  Contract.    (Directors'.) 


Resolved,  That  the  President  and  Secretary  be  hereby  authorized  and 
instructed  to  enter  into  a  contract  with  the  Wilbur-Collins  Construction 
Company,  in  the  name  of,  and  on  behalf  of  this  Company,  for  the  erec- 
tion of  a  brick  boiler  house,  the  construction  of  such  house  to  be  in 
accordance  with  the  plans  and  specifications  on  file  in  the  office  of  this 
Company,  and  the  price  and  terms  of  payment  therefor  to  be  in  accord- 
ance with  the  written  proposition  submitted  by  said  Wilbur-Collins 
Construction  Company. 

201 


302  CORPORATE  MANAGEMENT 

Form  37. — To  Declare  Dividend.     (Directors'.) 

Resolved,  That  the  sum  of  Two  Thousand  Dollars  be  and  hereby  is 
appropriated  and  set  aside  from  the  surplus  profits  of  this  Company  for 
the  payment  of  the  regular  two  per  cent,  quarterly  dividend  upon  its 
outstanding  stock,  said  dividend  to  be  due  and  payable  on  the  loth  day 
of  January,  1903. 

Resolved  Further,  That  the  Treasurer  of  this  Company  be  authorized 
and  instructed  to  notify  the  stockholders  of  such  dividend  and  to  pay  .the 
same  when  due. 


Form  38. — To  Appoint  Managing  Director.     (Directors'.) 

Resolved,  That  Mr.  William  S.  Weston  be  and  hereby  is  appointed 
Managing  Director  of  this  Company,  with  general  supervision  and 
direction  of  its  business  interests  and  with  such  other  powers  as  the 
Board  of  Directors  of  this  Company  may  from  time  to  time  confer  upon 
him,  but  without  salary  unless  hereafter  expressly  granted  by  formal 
resolution  of  this  Board. 


Form  39. — To  Call  Special  Meeting  of  Stockholders.     (Direct- 
ors'.) 

Resolved,  That  a  special  meeting  of  the  stockholders  of  this  Com- 
pany be  called  to  meet  in  the  office  of  the  Company,  No.  25  Maiden 
Lane,  New  York,  on  the  isth  day  of  April,  1003,  at  10  A.  M.,  for  the 
purpose  of  considering  and  acting  upon  proposed  amendments  to  the 
by-laws  of  the  Company,  as  follows: 

1.  To   give  the   Directors   power   to   fill  vacancies   occurring   in   the 
Board. 

2.  To  create  the  office  of  Second  Vice-President  and  of  Managing 
Director  and  to  define  the  duties  thereof. 

3.  To  change  the  day  of  the  annual  meeting  of  the  Company  from  the 
first  Tuesday  in  January  to  the  second  Wednesday  of  that  month. 


Form  40. — To  Ratify  Sale  of  Property.     (Directors'.) 

Whereas,  The  President  and  Treasurer  of  this  Company  have  here- 
tofore, on  the  226  day  of  June,  1903,  sold  and  disposed  of  the  machinery, 
tools  and  other  apparatus  belonging  to  this  Company  and  at  that  time  in 
the  premises  No.  235  Hamilton  St.,  Newark,  New  Jersey;  said  property 
being  sold,  in  the  name  of  the  Company,  to  the  Wells  Machinery  Com- 
pany of  Jersey  City  for  the  sum  of  $2,750,  of  which  amount  $1,000  was 
paid  in  cash  and  the  balance  by  note  of  the  said  Wells  Machinery  Co., 
at  ninety  days,  with  interest  at  6%  until  paid ;  and 

Whereas,  At  the  time  said  officers  of  the  Company  were  unable  to 
secure  the  authority  of  the  Board  of  Directors  for  said  sale  on  account 
of  the  absence  of  a  majority  of  the  members  of  said  Board  from  the 
City,  but,  the  proposition  made  involving  an  immediate  decision,  acted 


RESOLUTIONS.  308 

in  the  matter  on  their  own  responsibility,  and  as  seemed  to  them  for  the 
best  interests  of  the  Company;  and 

Whereas,  Said  sale  meets  with  the  approval  of  the  Board  of  Directors 
of  this  Company  and  said  Board  is  desirous  of  ratifying  and  confirming 
the  same; 

Now  Therefore  Be  It  Resolved,  That  the  action  of  the  said  officers  of 
this  Company  in  selling  and  disposing  of  the  aforementioned  property, 
as  aforesaid,  is  hereby  ratified,  approved  and  confirmed,  and  the  said 
sale  is  accepted  as  the  sale  of  the  Company,  and  the  assignments  therein 
are  ratified,  confirmed  and  accepted  as  the  duly  executed  assignments 
of  this  Company,  and  as  of  the  same  force  and  effect  as  if  entered  into 
under  the  direct  instructions  of  this  Board 


Form  41. — To  Authorize  Sale  of  Entire  Assets.     (Stockhold- 
ers'.) 


Whereas,  A  certain  proposition  has  been  made  by  Wm.  F.  Gaynor 
and  Jas.  P.  O'Reilly,  as  Trustees  for  the  organization  of  the  New  Hamp- 
shire Granite  Company,  to  purchase  the  entire  plant  and  assets  of  this 
Company,  'save  cash  in  bank,  for  $10,000  in  cash  and  $40,000  par  value  of 
the  stock  of  said  New  Hampshire  Granite  Company;  and 

Whereas,  Said  proposition  is  approved  by  the  stockholders  of  this 
Company; 

Be  It  Resolved,  That  the  Directors  of  this  Company  be,  and  hereby 
are,  authorized,  instructed  and  empowered  to  accept  the  said  proposition 
for  the  purchase  of  its  assets,  and  to  do  all  things  necessary  to  carry 
such  acceptance  into  effect  according  to  the  terms  of  said  proposition. 


The  directors,  until  authorized  thereto  by  unanimous 
action  of  all  the  stockholders,  have  no  authority  to  sell  the  en- 
tire assets  of  a  company,  unless  it  were  insolvent  or  in  a  failing 
condition.  The  object  of  the  preceding  resolution  and  the  one 
which  follows  is  to  secure  for  the  directors  the  power  to  act. 
Resolutions  of  this  nature  must  usually  be  adopted  by  the  unani- 
mous vote  of  all  the  stockholders.  If  otherwise,  the  dissenting 
or  non-participating  stockholders  might  intervene  to  prevent 
the  proposed  sale,  or  might  be  able  later  to  set  the  sale  itself 
aside.  In  a  corporation  where  the  stock  was  in  many  hands, 
it  would  be  difficult  to  get  all  the  stockholders  to  agree  to  such 
a  sale,  but  in  the  smaller  or  close  corporations  it  is  not  infre- 
quently done.  By  statute,  in  New  York,  two-thirds  in  interest 
of  the  stockholders  may  effect  a  sale  of  the  entire  assets  to 


204  CORPORATE  MANAGEMENT. 

another  domestic  corporation  provided  they  buy  the  stock  of 
all  dissenting  stockholders  at  a  duly  appraised  value. 

Form  42. — To  Authorize  Sale  of  Entire  Assets.     Conditional. 
(Stockholders'.) 

Whereas,  A  certain  proposition  has  been  made  by  the  Cumberford 
Silk  Manufacturing  Company  of  Paterson  for  the  purchase  of  the  entire 
property  of  this  Company,  save  cash  in  bank  and  bills  and  accounts  re- 
ceivable, the  consideration  offered  being  $150,000  in  cash  and  $150,000 
face  value  of  stock  in  a  certain  new  corporation  to  be  formed  for  the 
purpose  of  taking  over  the  business  and  "properties  of  the  two  Com- 
panies; and 

Whereas,  The  stockholders  of  this  Company  are  favorably  impressed 
with  said  proposition,  but  believe  that  a  full  legal  investigation  of  the 
whole  matter  should  be  made  before  proceeding  further; 

Now  Therefore  Be  It  Resolved,  That  the  stockholders  of  this  Com- 
pany do  hereby  instruct  and  authorize  the  Directors  of  the  Company  to 
employ  such  competent  legal  assistance  as  may  be  necessary  to  investi- 
gate and  report  upon  said  proposition  in  all  its  phases,  and,  if  such  in- 
vestigation shall  show  that  there  are  no  legal  objections  to  the  con- 
templated sale,  to  accept  the  said  proposition,  and  to  do  all  things  neces- 
sary to  carry  such  acceptance  into  effect. 


For  manner  of  entering  the  above  resolution  in  minutes  see 
Minutes  of  Adjourned  Special  Meeting  of  Stockholders, 
Form  96. 

Form  43. — To  Sell  Entire  Assets.     (Directors'.) 

Whereas,  A  certain  proposition  has  been  made  by  the  Trustees  for  the 
Organization  of  the  New  Hampshire  Granite  Company  to  purchase  the 
entire  plant  and  assets  of  this  Company  for  $10,000  in  cash  and  $40,000  in 
stock  of  the  said  proposed  corporation,  as  set  forth  in  their  written 
proposition  heretofore  ordered  to  be  spread  upon  the  minutes  of  this 
meeting;  and 

Whereas,  The  stockholders  of  this  Company  in  duly  assembled  meet- 
ing, at  _ which  all  the  voting  stock  of  the  Company  was  represented,  by 
resolution  unanimously  carried,  authorized  and  instructed  this  Board  to 
accept  and  carry  into  effect  said  proposition ; 

Now  Therefore  Be  It  Resolved,  That  the  said  proposition  be  and  the 
same  is  hereby  accepted  by  this  Company  on  the  terms  set  forth  in  said 
written  proposals  as  entered  upon  the  minutes  of  this  meeting,  and  the 
proper  officers  of  the  Company  are  hereby  authorized  and  empowered 
to  execute  all  proper  instruments  to  carry  such  acceptance  into  force 
and  effect,  and  to  do  all  such  other  things  in  connection  with  such  sale 
and  the  subsequent  transfer  of  property,  as  may  be  found  necessary  for 
its  proper  consummation. 


RESOLUTIONS.  205 

Upon  the  passage  of  this  resolution,  or  prior  thereto,  the 
proposal  upon  which  it  is  based  would,  either  by  motion,  or  by 
direction  of  the  presiding  officer,  be  ordered  spread  upon  the 
minutes  of  the  meeting.  The  resolution  following  such  entry 
of  the  proposal  constitutes  a  complete  and  formal  acceptance 
thereof. 

Form  44. — To    Authorize    Issuance   of    Stock   for   Property. 
(Stockholders'.) 

Whereas,  A  proposition  has  been  received  from  Mr.  Wilson  M. 
Adair  offering  to  sell,  assign  and  convey  to  this  Company  the  property 
at  Greenpoint,  Long  Island,  known  as  the  Adair  Manufacturing  Plant, 
all  as  set  forth  in  said  proposition,  in  exchange  for  the  entire  capital 
stock  of  this  Company,  to  be  issued  full-paid  and  non-assessable  to  the 
order  of  the  said  Wilson  M.  Adair;  and 

Whereas,  It  appears  to  the  stockholders  of  this  Company  that  the 
said  property  is  desirable  for  the  purposes  of  this  Company  and  is 
reasonably  worth  the  purchase  price  thereof; 

Now  Therefore  Be  It  Resolved,  That  the  said  proposition  for  the 
exchange  of  said  property  for  the  entire  capital  stock  of  this  Company, 
as  set  forth  in  said  proposition,  be  and  hereby  is  approved,  and  the 
Board  of  Directors  of  this  Company  is  hereby  authorized,  empowered 
and  instructed  to  accept  the  said  proposition,  and  to  cause  the  entire 
capital  stock  of  the  Company  to  be  issued  for  the  said  property  in  ac- 
cordance with  its  terms. 

Where  a  company  has  been  organized  for  the  purpose  of 
taking  over  property  in  payment  for  its  stock,  a  resolution  simi- 
lar to  the  foregoing  would  be  adopted  at  the  first  meeting  of 
the  stockholders.  See  Form  91,  "  Minutes  of  First  Meeting 
of  Stockholders." 


Form  45. — To  Issue  Stock  for  Property.     (Directors'.) 

Whereas,  The  property  offered  in  exchange  for  the  capital  stock  of 
this  Company  by  Mr.  Wilson  M.  Adair  in  his  proposition  to  the  Com- 
pany is  adjudged  by  this  Board  to  be  of  the  reasonable  value  of  Fifty 
Thousand  ($50,000)  Dollars,  and  to  be  necessary  for  the  use  and  lawful 
purposes  of  this  Company; 

Be  It  Resolved,  That  the  said  property  be  and  hereby  is,  in  accord- 
ance with  the  authorization  and  instructions  of  the  stockholders  of  this 
Company,  accepted  in  full  payment  for  the  said  capital  stock  of  the  Com- 
pany in  accordance  with  the  terms  of  said  proposition,  and  the  proper 
officers  of  this  Company  are  hereby  authorized  and  directed  to  receive 


206  CORPORATE  MANAGEMENT. 

the  duly  executed  transfers  and  assignments  of  the  property  specified  in 
said  proposition,  and  to  issue  in  exchange  therefor  the  entire  stock  of  the 
Company,  full  paid  and  non-assessable,  to  such  person  or  persons  as  may 
be  designated  by  the  written  orders  of  the  aforementioned  Wilson  M.  Adair, 
except  only  as  to  the  shares  subscribed  for  by  the  incorporators,  which  shall 
be  issued  to  them  or  their  order. 


Inasmuch  as  the  written  proposition  for  exchange  of  prop- 
erty for  stock  would  be  entered  in  full  in  the  minutes  of  the 
directors'  meeting  at  which  the  above  resolution  would  be 
adopted,  a  lengthy  preamble  is  not  required.  See  "  Minutes 
of  First  Meeting  of  Directors,"  Form  94.  See  also  Chapter 
XXVII.  "  Exchange  of  Property  for  Stock,"  for  form  of 
proposition  and  for  further  information  on  this  subject. 


CHAPTER  XXV. 
RESIGNATIONS. 


Form  46. — Resignation  of  Director. 


To  the  Board  of  Directors 

of  the  CANSO  CABLE  COMPANY  : 

GENTLEMEN — I  hereby  tender  my  resignation  as  a  member  of  your  body, 
my  frequent  absences  from  the  City  rendering  proper  attention  to  my 
duties  as  a  Director  of  the  Company  impossible. 

Yours  very  respectfully, 

HENRY  M.  STANTON. 
New  York  City, 

June  i,  1903. 

The  above  resignation  is  somewhat  informal,  but  is  a  cus- 
tomary form  where  the  relations  amongst  the  directors  are 
friendly.  It  is  so  worded  that  action  of  the  board  is  necessary 
to  make  it  effective.  A  statement  of  the  reason  for  resigning 
is  not  essential,  but  is  usually  given.  In  accepting  such  a 
resignation,  if  the  party  submitting  same  were  present  at  the 
meeting,  the  acceptance  would  usually  be  worded  to  take  effect 
at  the  close  of  the  meeting.  If  accepted  without  any  such  quali- 
fication, its  effect  would  be  immediate ;  and  the  party  resigning 
would  cease  to  be  a  member  of  the  board  at  the  instant  of 
acceptance. 

Sometimes  a  director  is  elected  to  fill  a  vacancy  temporarily 
until  a  permanent  incumbent  may  be  selected.  In  such  a  case, 
the  temporary  director's  resignation  would  at  the  time  of  election 
be  secured  and  filed  with  the  secretary.  Then  when  a  suitable 
person  for  permanent  director  was  found,  the  resignation  on 
file  would  be  accepted  and  his  successor  at  once  elected.  The 
following  form  of  resignation  would  be  suitable  under  such 
circumstances : 

207 


208  CORPORATE   MANAGEMENT. 

Form  47. — Resignation  of  Director.    Effective  on  Acceptance. 


To  the  Board  of  Directors 

of  the  JERSEY  CITY  MILLING  COMPANY: 

GENTLEMEN — I  hereby  tender  my  resignation  as  a  member  of  your  body 
to  take  effect  upon  acceptance. 

Very  respectfully, 

JOHN  N.  McNAiR. 
Jersey  City,  New  Jersey, 

July  25,  1903. 


Such  a  resignation  would  not  affect  the  status  of  the  party 
as  a  director  until  its  acceptance,  and  holds  good,  unless  form- 
ally withdrawn,  until  his  term  as  a  director  expires.  If  he  were 
again  elected  to  his  position  as  a  director,  the  old  resignation 
would  be  of  no  further  effect  and  would  have  to  be  renewed  if 
his  same  uncertain  tenure  of  office  were  to  be  maintained. 

It  should  be  borne  in  mind  that  the  party  tendering  such  a 
resignation  has  the  right  to  withdraw  it  at  any  time  prior  to  its 
acceptance,  and  that  in  such  event  he  could  not  be  removed 
from  his  position  on  the  board  until  the  end  of  his  term.  If  it 
were  desired  to  remove  the  possibility  of  such  a  contingency, 
the  resignation  should  be  accepted  as  soon  as  tendered,  such 
acceptance  to  take  effect  upon  the  election  of  his  successor. 

The  final  clause  of  the  foregoing  resignation  is  of  no  fur- 
ther direct  effect  than  to  show  its  intent,  as  a  resignation 
"  tendered  "  could  not  take  effect  until  accepted. 

Form  48. — Resignation  of  Director.    Immediate. 


To  the  Board  of  Directors 

of  the  WILLIS  MANUFACTURING  COMPANY  OF  NEW  YORK  : 

GENTLEMEN — I  hereby  resign  my  membership  in  your  body,  such  resig- 
nation to  take  immediate  effect. 

Yours  very  respectfully, 

WILLIAM  C.  CARNEY. 
123  Fifth  Ave.,  New  York, 

June  isth,  1903. 


RESIGNATIONS.  209 

The  effect  of  the  above  resignation  would  be  the  immediate 
severance  of  the  official  relations  of  the  party  signing  same, 
so  soon  as  the  document  were  filed  with  the  secretary  of  the 
company.  No  action  of  the  board  is  required.  This  peremp- 
tory form  of  resignation  is  often  employed  in  cases  where  a 
director  wishes  to  escape  responsibility  for  some  threatened 
action  of  the  board,  or  wishes  to  express  his  disapproval  of 
some  action  taken  by  the  board. 

Form  49. — Resignation  of  Director.    Future  Date. 

To  the  Board  of  Directors 

of  the  NEWTOWN  OIL  COMPANY: 

GENTLEMEN — I  hereby  tender  my  resignation  as  a  member  of  your  body, 
my  said  resignation  to  take  effect  March  21  st,  1903. 

Very  respectfully 

J.  B.  MINNINGTON. 
Newark,  New  Jersey, 

February  n,  1903. 

Such  a  resignation  should  be  accepted  by  resolution  of  the 
board,  though  it  is  to  be  noted  that  its  effective  date  cannot 
be  in  any  way  advanced  by  board  action.  It  is  intended  to 
give  the  board  ample  time  to  provide  a  suitable  successor. 

It  should  be  noted  that  the  board  cannot  refuse  to  accept  a 
positive  resignation.  If  it  is  tentative  in  its  phrasing,  as  "  I 
hereby  tender,  etc.,"  the  board  might  temporarily  nullify  the 
intent  of  such  resignation  by  refraining  from  or  declining  its 
acceptance.  In  such  case  the  party  submitting  the  resignation 
could  put  in  a  positive  and  immediate  resignation,  and  thereby 
at  once  terminate  his  connection  with  the  board. 

Resignations  and  other  communications  for  the  board  of 
directors  are  frequently  addressed  to  the  secretary,  or  even  to 
the  president  of  the  company.  The  better  practice  is  to  address 
such  communications  to  the  board,  addressing  the  envelope  in 
which  they  are  enclosed  to  the  secretary  or  the  president  of  the 
company  as  such.  It  is  then  the  duty  of  the  officer  receiving 
such  communication  to  see  that  it  gets  before  the  board. 
14 


210  CORPORATE   MANAGEMENT. 

Form  50. — Resignation  of  President. 

To  the  Board  of  Directors 

of  the  ELDRIDGE  TYPEWRITER  COMPANY  : 

GENTLEMEN— I  hereby  resign  my  position  as  President  of  the  Eldridge 
Tpyewriter  Company  and  as  a  member  of  its  Board  of  Directors. 

Very  respectfully, 

VERNON  M.  MCDOWELL. 
New  York  City, 

July  I,  1903. 

This  resignation  is  peremptory  and  immediate,  terminating 
without  action  of  the  board  all  official  relations  of  the  party 
signing  same.  A  somewhat  less  peremptory  form  than  the  one 
given  would  be  worded,  "  I  hereby  tender  my  resignation  as, 
etc. — and  request  your  immediate  acceptance  of  same." 

Where  some  difficulty  has  arisen  between  the  directors  and 
an  official  and,  while  not  absolutely  resigning,  this  latter  wishes 
a  "  vote  of  confidence,"  or  an  expression  of  the  feeling  of  the 
board  towards  him,  the  following  form  would  be  suitable: 

Form  51. — Resignation  of  President.     Conditional. 

To  the  Board  of  Directors 

of  the  WILLIS  CONSTRUCTION  Co. : 

GENTLEMEN — I  hereby  tender  my  resignation  as  President  and  as  a 
director  of  your  Company,  requesting  your  immediate  action  thereon. 

Very  respectfully. 

JOHN  J.  GRISWOLD. 
Wellsville,  New  Jersey, 

July  16,  1903. 

If  the  majority  of  the  board  wished  to  retain  the  president 
in  his  position,  they  would  vote  that  the  resignation  be  not 
accepted,  or  would  vote  against  a  motion  for  its  acceptance. 
In  either  case  the  president's  resignation  would  be  of  no  effect, 
and  the  incident  would  be  merely  an  indorsement  of  him  and 
his  position.  If  those  opposed  to  the  president  were  in  the 
majority,  however,  and  accepted  the  resignation,  his  official 
connection  with  the  company  would  be  at  an  end. 


RESIGNATIONS.  211 

Form  52. — Resignation  of  Treasurer. 

NEW  YORK,  March  2,  1903. 
To  the  Board  of  Directors 

of  the  NELSON  CARBIDE  COMPANY, 

173  Duane  St.,  New  York: 

GENTLEMEN — My  permanent  departure  from  the  City  on  the  I5th  of  this 
month  compels  me  to  resign  my  position  as  Treasurer  of  your  Company. 
As  I  leave  so  shortly,  I  should  much  appreciate  prompt  action  on  my 
resignation,  which  is  hereby  tendered.  I  would  also  ask  the  early  ap- 
pointment of  a  committee — or  the  authorization  of  my  successor — to  audit 
my  accounts  and  to  take  over  and  receipt  for  the  moneys  and  other  property 
of  the  Company  now  in  my  charge. 

Regretting  the  unavoidable  termination  of  my  pleasant  official  rela- 
tions with  the  Company,  I  remain, 

Respectfully, 

JOHN  WILLS. 

In  the  larger  corporations  upon  the  resignation  or  retire- 
ment of  the  treasurer,  an  auditing  committee  is  appointed,  or 
an  expert  accountant  or  accountants  employed  to  examine  the 
treasurer's  books  and  verify  their  statements.  The  treasurer's 
bondsmen  are  not  released  until  this  examination  has  been  fully 
completed  and  a  satisfactory  report  returned. 

In  the  smaller  corporations  this  examination  is  much  less 
formal.  Usually  either  a  committee  of  the  board  is  appointed 
to  examine  the  accounts,  or,  more  frequently,  the  newly  elected 
treasurer  is  authorized  to  examine  the  books  of  his  predecessor 
and  to  receive  and  receipt  for  any  property  of  the  company 
turned  over  by  the  retiring  official. 


CHAPTER  XXVI. 
NOTICES. 


(For  Notices  of  Meetings,  See  Chapter  XXXIII.) 
Form  53. — Notice  of  Stock  Assessment. 

ASSESSMENT  NOTICE. 


WILLITT  MACHINE  COMPANY. 


Notice  is  hereby  given  that  by  duly  authorized  resolution  of  the  Board 
of  Directors,  an  assessment  of  Fifteen  (15%)  per  cent,  on  the  Capital 
Stock  of  the  Company  is  called  for,  to  be  paid  to  the  Treasurer  of  the 
Company  on  or  before  the  I5th  day  of  June,  1903. 

JOHN  R.  WILLITT, 
Newark,  New  Jersey,  Secretary. 

May  15,  1903. 
Make  checks  payable  to  Treasurer. 


This  form  is  suitable  for  any  state.  It  would  be  published 
in  some  local  newspaper,  or  a  copy  be  sent  to  every  stockholder 
of  record,  or  both  methods  followed,  according  to  the  require- 
ments of  the  statutes  of  the  state,  of  the  by-laws,  or  of  the 
special  resolution  under  which  the  assessment  was  levied. 
Usually  the  times  for  assessments  and  the  amounts  and  the 
authority  by  which  they  are  to  be  levied,  are  set  out  in  the 
subscription  list  which  is  signed  by  the  subscribers  to  the  stock. 
(See  Forms  1-6.) 

In  New  Jersey  under  the  statute  requirements  not  less  than 
thirty  days'  notice  of  an  assessment  must  be  given ;  hence,  if  in 
the  organization  of  a  company,  or  in  some  later  emergency, 
immediate  payment  of  a  stock  assessment  is  desirable  or  neces- 
sary, it  can  only  be  secured  by  the  formally  expressed  consent 
of  all  the  stockholders.  A  simple  form  of  waiver  used  in  such 
cases  is  as  follows : 

212 


NOTICES.  213 

Form  54. — Waiver  of  Assessment  Notice.    New  Jersey. 

WAIVER  OF  NOTICE  OF  ASSESSMENTS. 


THE  CANFIELD   CHEMICAL  COMPANY. 


We,  the  undersigned,  being  all  the  subscribers  to  the  Capital  Stock 
of  the  Canfield  Chemical  Company,  do  hereby  waive  all  requirements  of 
the  laws  of  the  State  of  New  Jersey  as  to  notice  of  assessments  upon 
the  shares  of  stock  of  said  Company  subscribed  for  by  us,  and  as  to  the 
time  and  place  of  payment  of  any  such  assessments,  and  do  hereby  agree 
to  pay  to  the  Treasurer  of  said  Company  all  or  any  part  of  the  amount 
to  be  paid  upon  our  said  subscriptions,  in  such  amounts  and  at  such 
times  and  places  as  may  be  prescribed  by  the  Board  of  Directors  of  said 
Company. 

JAMES  L.  CANFIELD. 
EDWIN  WALKER. 

Newark,  New  Jersey,  ELBERT  J.  KEEN. 

January  24,  1903. 


This  waiver  is  general  in  its  terms  giving  the  directors 
power  to  call  any  part  of  the  amount  due  on  stock  subscriptions, 
or  the  whole  of  it,  at  any  time  at  their  discretion.  The  waiver 
might  be  made  to  apply  to  one  particular  assessment  only,  if 
desired.  The  form  given  is  used  in  New  Jersey  more  particu- 
larly, but  would  be  applicable,  with  the  necessary  changes,  in 
any  other  state  if  it  were  desirable  to  modify  the  terms  of 
stock  subscriptions  as  to  time  and  amounts  of  payments.  As 
worded  above  the  waiver  would  have  to  be  signed  by  all  the 
subscribers  before  it  became  effective. 

Form  55. — Notice  of  Dividend. 

CHALMETTE   CHEMICAL   COMPANY. 


At  a  meeting  of  the  Board  of  Directors  held  this  day  there  was  de- 
clared from  out  the  net  earnings  of  the  Company  for  the  six  months 
ending  December  31,  1902,  a  semi-annual  dividend  of  Four  Per  Cent,  the 
same  to  be  paid  January  30,  1903,  to  the  stockholders  of  record  at  the 
closing  of  the  transfer  books,  January  20,  1903. 

Stock  transfer  books  will  be  closed  at  3  P.  M.  January  20,  1903,  and  be 
reopened  January  30,  1903,  at  10  A.  M. 

JAMES  L.   PIERSON. 

New  York,  Jan.  13,   1003.  Treasurer. 


314  CORPORATE   MANAGEMENT. 

In  a  small  corporation  this  dividend  notice  would  be  mailed 
to  each  stockholder.  In  a  large  corporation  it  would  be  mailed 
to  each  stockholder  and  would  also  usually  be  published  in  the 
local  papers,  the  number  of  times  of  publication  and  the  par- 
ticular paper  or  papers  being  ordinarily  designated  by  the  board 
of  directors. 

Form  56. — Notice  of  Dividend.    Preferred  Stock. 
AMERICAN  WOOL  OIL  COMPANY. 


BOSTON,  Mass.,  June  24,  1903. 

Notice  is  hereby  given  that  a  dividend  of  Three  Per  Cent,  on  the 
Preferred  Capital  Stock  of  the  American  Wool  Oil  Company  will  be  paid 
on  the  15th  of  July,  1903,  to  stockholders  of  record  at  the  close  of  busi- 
ness July  3,  1903. 

Transfer  books  for  Preferred  Stock  will  be  closed  at  3  P.  M.  July  3, 
1903,  and  will  be  reopened  at  10  A.  M.  July  16,  1903. 

WILLIAM  B.  HENDRICKS, 

Treasurer. 


Form  57. — Notice  of  Election  of  Director. 

ORMOND  BRASS  COMPANY. 
20  Broad  St.,  New  York. 


Mr.  JOHN  B.  WYLIE,  JUNE  22,  1903. 

136  Madison  Ave.,  City: 

DEAR  SIR — You  are  hereby  notified  that  at  the  annual  meeting  of  the 
Ormond  Brass  Company  held  June  22,  1003,  you  were  duly  elected  a 
member  of  the  Board  of  Directors  of  that  Company.  The  next  regular 
meeting  of  the  Board  will  be  held  in  the  office  of  the  Company  June  29, 
1903,  at  3  P.  M.  Will  you  kindly  be  present  and  participate  in  that  meet- 
ing. 

Yours  very  respectfully, 

JOHN  M.  GAINESBOROUGH, 

Secretary. 

Usually  before  the  election  of  any  one  as  director  those 
interested  assure  themselves  that  he  will  serve  if  elected.  In 
such  case  the  notification  of  his  election  need  not  ask  his  accept- 
ance of  the  position.  Where,  however,  there  is  any  uncer- 
tainty in  the  matter,  the  notification  of  election  should  request 


NOTICES. 

the  party  elected  to  indicate  his  acceptance  of  the  position.  In 
event  of  refusal  to  accept  a  position  after  election  thereto,  the 
election  is  of  no  effect,  as  a  man  cannot  be  forced  into  an  office 
against  his  will.  In  case  of  a  director-elect's  refusal  to  serve, 
either  a  meeting  of  the  stockholders  would  have  to  be  called  to 
fill  the  position,  or,  if  authorized  to  fill  vacancies  in  the  board 
by  the  by-laws,  the  board  of  directors  would  fill  such  vacancy 
at  its  next  meeting. 

Form    58. — Notice    of    Election    as    Director.      Requesting 
Acceptance. 

BLACK  DIAMOND  DRILL  CO., 
23  State  St.,  Boston,  Mass. 

Mr.  HENRY  S.  GOULD,  FEBRUARY  16,  1903. 

Arlington  Heights,  Mass.: 

t  DEAR  SIR — At  the  last  meeting  of  the  Board  of  Directors  of  the  Black 
Diamond  Drill  Company,  held  February  14,  1903,  you  were  elected  a 
member  of  the  Board  to  fill  the  vacancy  caused  by  the  resignation  of  Mr. 
Henry  Fielding.  Will  you  kindly  indicate  your  acceptance  of  the  office 
at  your  early  convenience. 

The  next  regular  meeting  of  the  Board  will  be  held  in  the  office  of  the 
Company  March  14,  1903,  at  8  P.  M. 

Yours  very  respectfully, 

SIMRELL  B.  IVES, 

Secretary. 


Form  59. — Notice  of  Election  as  General  Manager. 

THE  WILLIS  OIL  WELL  COMPANY, 
256  Madison  Avenue,  New  York. 

Mr.  JOHN  H.  GALT,  MARCH  18,  1903. 

758  Broadway,  New  York: 

DEAR  SIR — At  a  meeting  of  the  Board  of  Directors  of  this  Company 
held  March  17,  1903,  you  were  elected  General  Manager  of  the  Company 
at  a  salary  of  eighteen  hundred  dollars  per  annum,  payable  in  monthly 
instalments  of  one  hundred  and  fifty  dollars  each,  your  employment  and 
duties  to  begin  on  the  first  day  of  June,  1903,  and  the  first  instalment  of 
your  salary  to  be  due  and  payable  on  the  first  day  of  the  following  month. 
Will  you  kindly  notify  us  without  delay  of  your  acceptance  of  the 
position  and  report  for  duty  on  the  day  above  designated. 

Yours  very  truly, 

GERRITT  B.  SILVERTON, 

Secretary. 


CHAPTER  XXVII. 
EXCHANGE    OF    PROPERTY    FOR    STOCK. 


At  the  present  time  a  very  large  proportion  of  the  corpora- 
tions organized  are  so  organized  for  the  express  purpose  of 
taking  over  inventions,  mines,  businesses  or  property  of  other 
kinds.  In  such  cases,  the  property  taken  over  or  purchased  is 
usually  paid  for  by  the  issue  of  the  company's  stock.  The 
forms  of  proposal  for  such  exchange  of  property  for  stock 
which  follow  are  suggestive  and  may  be  readily  modified  to 
meet  the  varying  conditions. 

A  formal  consideration  of  the  first  form  of  proposal  (Form 
60)  will  be  found  in  the  minutes  of  the  first  meeting  of  stock- 
holders (Form  91)  in  Chapter  XXXIV.  and  also  in  the 
minutes  of  the  first  meeting  of  directors  (Form  94)  of  the  same 
chapter.  In  the  stockholders'  minutes  the  proposition  is 
referred  to,  and  appropriate  resolutions  authorizing  and  direct- 
ing its  acceptance  by  the  directors,  are  adopted.  In  the 
directors'  minutes,  the  proposition  is  embodied  in  full  and  is 
accepted  by  formal  resolution  of  the  directors. 

This  proposition  involves  the  issue  of  the  entire  stock  of 
the  company  in  payment  for  the  property  offered.  Usually  it  is 
desirable  that  the  entire  stock,  in  such  cases,  should  be  paid  up 
in  this  way.  Inasmuch,  however,  as  a  certain  portion  of  the 
stock  is  necessarily  already  subscribed  for  by  the  incorporators 
of  the  company,  some  adjustment  of  these  subscriptions  must 
be  made  before  the  entire  stock  can  be  full  paid  in  accordance 
with  the  terms  of  the  proposition.  The  matter  may  be  arranged 
in  several  ways. 

216 


EXCHANGE  OF  PROPERTY   FOR  SiOCK.  217 

A  simple  method,  set  forth  in  Form  60,  is  for  the  person 
making  the  proposition  to  secure  in  advance  the  consent  of  the 
incorporators  to  the  payment  by  him  of  their  subscriptions. 
This  is  entirely  legitimate  as,  so  far  as  the  corporation  is  con- 
cerned, it  is  a  matter  of  indifference,  if  subscriptions  are  duly 
and  properly  paid,  whether  they  are  paid  by  the  subscribers 
themselves  or  by  some  one  else  for  them.  In  event  of  such 
arrangement,  the  stock  subscribed  for  by  the  incorporators 
would  be  issued  to  them  or  to  their  order. 

Another  method  is  for  the  incorporators  to  assign  their  sub- 
scriptions to  the  person  making  the  proposition  (See  Form  61) 
so  that  in  event  of  the  acceptance  of  his  proposition  he  takes 
over  such  subscriptions  and  receives  the  stock  thereunder.  The 
assignment  is  made  conditional,  however,  so  that  it  is  of  no 
effect  unless  the  proposition  is  accepted,  and  then  not  until  the 
transfer  of  the  property  to  the  corporation  is  actually  made.  If 
the  assignment  were  absolute  and  immediate,  the  incorporators, 
having  parted  with  their  entire  interests  in  the  company,  might 
be  disqualified  from  acting  in  the  first  meetings.  After  the 
assignment  became  effective,  any  of  the  incorporators  desiring 
to  continue  as  stockholders  or  directors  of  the  company  would 
have  to  acquire  one  or  more  shares  of  its  stock  in  order  to  be 
properly  qualified. 

It  may  be  noted  that  the  stock,  under  the  propositions  given, 
is  to  be  issued  to  the  order  of  the  person  making  the  propo- 
sition. Usually  the  stock  is  issued  in  one  certificate  direct  to 
such  person  and  he  thereafter  breaks  this  certificate  up  and 
distributes  the  stock  as  he  sees  fit,  but  there  is  no  legal  objection 
to  the  original  issue  of  such  stock  in  any  desired  number  of 
certificates  direct  to  the  different  parties  to  whom  he  may  wish 
it  to  go.  Payment  to  his  order  is  as  much  payment  as  if  made 
to  him  direct. 

If,  in  any  case,  the  incorporators  prefer  to  retain  and  pay 
the  subscriptions  made  by  them,  the  proposition  must  be  so 
modified  as  to  only  call  for  the  unsubscribed  stock.  In  such 
event,  the  proposition  of  Form  60  would  call  for  but  $45,000 


218  CORPORATE  MANAGEMENT. 

face  value  of  stock  (450  shares)  as  $5,000  face  value  of  the 
stock  (50  shares)  have  already  been  subscribed  for  by  the 
incorporators. 

Form  60. — Proposal  to  Exchange  Property  for  Stock. 

192  CLINTON  AVE.,  Brooklyn,  N.  Y., 

June  8,  1903. 
To  the  Stockholders  and  Directors  of 

THE  MARSTON  MANUFACTURING  COMPANY, 

Brooklyn,  New  York: 

GENTLEMEN — In  exchange  and  full  payment  for  the  entire  capital  stock 
of  the  Marston  Manufacturing  Company,  including  with  the  consent 
of  the  incorporators,  the  shares  subscribed  for  by  them,  I  hereby  offer 
you  the  plant  for  the  manufacture  of  cooper's  supplies  and  machinery, 
belonging  to  me  and  located  on  the  water  front  near  the  foot  of  Huron 
Street,  Greenpoint,  Long  Island;  said  plant  consisting,  in  general,  of 
one  and  one-half  acres  of  ground,  enclosed  on  the  land  side  with  an 
8- foot  brick  wall;  a  three-story  brick  building  thereon,  50' x  100',  with 
one-story  brick  power  and  boiler  house,  25'  x  50',  attached ;  also  one-story 
frame  warehouse,  50'  x  75'.  Included  with  said  plant  are  all  the  machinery, 
tools,  apparatus  and  materials,  raw  or  manufactured,  now  in  said  build- 
ings or  on  the  premises,  the  whole  being  sold  as  a  going  concern,  and 
all  of  said  plant  and  property  being  free  and  unincumbered  and  of  the 
reasonable  value  of  $50,000. 

If  the  above  proposition  is  accepted,  the  entire  capital  stock  of  your 
Company,  excepting  the  shares  already  subscribed  for,  is  to  be  issued  to 
my  order,  full-paid  and  non-assessable,  against  the  delivery  to  your 
representatives  of  such  duly  executed  deeds  and  assignments  of  the 
above  plant  and  property  as  may  be  satisfactory  to  your  attorneys. 

In  the  event  of  your  acceptance  of  the  foregoing  proposition,  I  shall 
donate  and  turn  over  to  your  Company  not  less  than  $20,000  face  value 
of  the  stock  received  by  me,  such  stock  to  be  used  at  the  discretion  and 
under  the  direction  of  your  Board  of  Directors,  for  the  purpose  of  pro- 
viding working  capital  for  the  Company. 

Yours  very  truly, 

WILSON  M.  ADAIR. 

(See  Resolutions,  Forms  44,  45.) 


Form  61. — Proposal  to  Exchange  Property  for  Stock.    With 
Assignment  of  Subscriptions. 


NEW  YORK  CITY,  January  26,  1903. 

To  the  HOLLINS  MANUFACTURING  COMPANY, 

565  Broadway,  New  York: 

GENTLEMEN — I  hereby  offer  in  exchange  and  full  payment  for  the  entire 
capital  stock  of  your  Company,  including  the  shares  subscribed  for  by  the 


EXCHANGE  OF  PROPERTY   FOR  STOCK.  219 

incorporators    thereof,    their    subscriptions    having   been    conditionally 
assigned  to  me,  the  property  described  below,  to  wit: 

United  States  Patent  No.  659,435  for  an  improvement  in  braiding 
machinery,  issued  October  9,  1900,  to  Emil  Strauss,  and  by  him  duly 
assigned  to  me;  also  United  States  Patent  No.  670,433  for  an  improvement 
in  sewing  machines,  issued  December  21,  1900,  to  Harry  B.  Anderson, 
and  by  him  duly  assigned  to  me. 

Upon  the  acceptance  of  this  present  proposition  and  the  passage  of  a 
resolution  of  your  Board  of  Directors  authorizing  the  issue  of  said  stock 
to  my  order,  I  will  execute  such  transfers  and  assignments,  in  form  ap- 
proved by  your  counsel,  as  may  be  necessary  to  vest  the  title  to  said 
property  in  your  Company. 

Yours  very  truly, 

HENRY  B.  OSGOOD. 


We,  the  undersigned,  being  all  the  incorporators  of  the  Hollins 
Manufacturing  Company,  in  consideration  of  the  sum  of  one  dollar  to 
each  of  us  in  hand  paid,  the  receipt  whereof  is  hereby  acknowledged  and 
for  other  good  and  valuable  considerations,  do  hereby  sell,  assign  and 
make  over  unto  Henry  B.  Osgood  all  of  our  subscription  rights  in  the 
said  company,  conditioned,  however,  upon  the  acceptance  by  said  com- 
pany of  his  proposition  of  this  date  to  take  the  whole  capital  stock  of 
said  company,  and  to  go  into  effect  only  upon  the  due  tender  by  him  of 
payment  for  such  capital  stock  according  to  the  terms  of  his  said  prop- 
osition. 

Witness  our  hands  and  seals  this  26th  day  of  January,  1903. 


In  presence  of  HERMANN  WELLS. 

WILLARD  HOLMES.  WILLIS  BOWEN. 

CHAUNCEY    ERLE. 
ELLIS  WELLS. 


L.  s. 
L.  s. 
L.  s. 

L.  S. 


CHAPTER  XXVIII. 
MEETINGS. 


The  forms  given  in  the  present  chapter  are  mainly  used  for 
the  guidance  or  reference  of  officers  in  the  conduct  of  meetings. 
The  "Alphabetical  List  of  Stockholders.  New  Jersey,"  (See 
Form  64)  is  to  some  extent  an  exception,  as  under  the  New 
Jersey  statutes  it  must  be  prepared  and  kept  on  hand  at  the 
time  of  annual  meetings  open  to  the  inspection  of  the  stock- 
holders. It  is  intended  as  well,  however,  for  official  reference 
and  use,  comes  properly  under  the  present  classification  and  is 
therefore  included. 

Form  62. — Order  of  Business.     Stockholders'  Meetings. 

ORDER  OF  BUSINESS. 


1.  Calling  of  Roll. 

2.  Proof  of  due  Notice  of  Meeting. 

3.  Reading  and  disposal  of  any  unapproved  Minutes. 

4.  Annual  Reports  of  Officers  and  Committees. 

5.  Election  of  Directors. 

6.  Unfinished  Business. 

7.  New  Business. 

8.  Adjournment. 

This  order  of  business  is  arranged  for  the  stockholders' 
annual  meeting.  For  special  meetings,  the  unnecessary  fea- 
tures, which  are  usually  No.  4,  "  Annual  Reports  of  Officers 
and  Committees,"  and  No.  5,  "  Election  of  Directors,"  must  be 
omitted.  The  regular  order  of  business  should  be  included  in 
the  by-laws,  and  be  followed  as  closely  as  possible.  (  See  "  By- 
Laws,"  Forms  21,  22,  under  Article  II.,  "  Stockholders.") 

220 


MEETINGS. 

Form  63. — Order  of  Business.     Directors'  Meetings. 


281 


ORDER  OF  BUSINESS. 


1.  Reading  and  disposal  of  any  unapproved  Minutes. 

2.  Reports  of  Officers  and  Committees. 

3.  Unfinished  Business. 

4.  New  Business. 

5.  Adjournment. 


This  order  of  business  applies  to  all  meetings  of  the  direc- 
tors, should  be  incorporated  in  the  by-laws  and  be  closely  fol- 
lowed. (See  By-law  Forms,  21  and  22,  under  Article  III., 
"  Directors.") 

Form  64. — Alphabetical  List  of  Stockholders.    New  Jersey. 


ALPHABETICAL  LIST  OF  STOCKHOLDERS 

of  the 
MALVERN  CUTLERY  COMPANY 

of 
Newark,  New  Jersey. 


NAME. 

RESIDENCE. 

SHARES 
OWNED. 

Adams,  John  C  

284  Roseville  Ave.,  New 
112  Bloomfield  Ave., 
215  Orange  Ave., 
241  vVaverly  Ave., 
987  Broad  St., 
53  South  nth  St., 
186  Roseville  Ave., 

irk,  N 

,J 

. 

500 
ISO 
250 
100 

506 

IOO 

50 

Barclay,  Mathew  H  

Darknell,  William  

Fannell,  Jasper  T  

Farmsworth,  John  R  

Gardner,  Joseph  

Harris,  Willis  H  

Under  the  statutes  of  New  Jersey,  the  secretary  is  required 
to  prepare,  at  least  ten  days  before  the  election  of  directors,  an 
alphabetical  list  of  the  stockholders  of  his  company,  giving  the 


222 


CORPORATE  MANAGEMENT. 


residence  and  number  of  shares  of  stock  owned  by  each.  This 
list  must  be  on  file  in  the  office  of  the  company  open  to  the 
inspection  of  the  stockholders,  and  must  be  produced  at  the 
time  and  place  of  election  for  the  inspection  and  information 
of  the  stockholders.  The  foregoing  partial  list  gives  the 
arrangement  usually  employed. 

For  his  own  use  the  secretary  should  provide  an  alphabet- 
ical list  of  the  stockholders  of  record,  with  convenient  rulings 
to  note  down  the  various  important  details,  as  follows : 

Form  65. — Secretary's  List  of  Stockholders. 

LIST  OF  STOCKHOLDERS 

of  the 

TERRE  BONNE  CEMENT  COMPANY. 
January  24,  1903. 


NAMES. 

SHARES 
OWNED. 

SHAKES 
ABSENT. 

PRESENT 

IN 

PERSON. 

PRESENT 

BY 

PROXY. 

NAME  OF  PROXY. 

Adams,  John  T  

SO 

Co 

Allison,  Jasper  P.  .    . 
Ames,  Henry  M  .  .    . 
Byrnes,  Samuel  B.    . 
Desmond,   Henry.    . 
Erricson,  Alfred  N  . 
Gough,  James  F..    . 
Henderson,  Francis  E 
Jasper,  John  C  

5° 
125 

So 
35 
15° 
250 

«5 
80 

125 

5° 
150 

"S 
80 

50 

35 
250 

W.  S.  Gibbs. 

Walter  James. 
James  B.  Allen. 

Jarvik,  Sigismund.   . 
Lewis,  Harkness  B  . 
Levine,  Elbert  S.  .    . 
Percival,  Ellis  T.  .    . 
Pearry,  Morris  

25 
275 

I25 
650 

no 

25 

275 
125 

no 

650 

James  B.Allen. 

Rossmore,  Albert  M  . 
Simpson,  Oliver  N.  . 

325 

75 

75 

325 

•• 

2,500 

100 

i,4i5 

985 

This  list  should  not  be  confounded  with  the  alphabetical  list 
of  stockholders  required  under  the  New  Jersey  laws.     (Form 


MEETINGS.  228 

64.)  It  is  merely  a  convenient  form  for  the  secretary's  own 
use  at  meetings  of  stockholders,  in  calling  the  roll  and  in  pre- 
serving in  compact  form  a  record  of  the  results. 

The  list  as  shown,  is  after  the  results  of  the  roll  call  have 
been  noted  upon  it.  Before  roll  call  only  the  names  given  in  the 
first  column,  and  the  number  of  shares  owned,  as  shown  in  the 
second  column,  would  appear  upon  it.  These  two  columns  are 
filled  out  before  the  meeting  from  the  stock  books  of  the 
company. 

On  calling  the  roll,  if  a  stockholder  were  not  represented  at 
the  meeting,  the  number  of  his  shares  would  be  noted  in  the 
third  column,  or  a  check  mark  in  this  third  column  might  be 
used  to  denote  absence  of  representation.  If  present  in  person, 
the  number  of  shares  owned  would  be  entered  in  the  fourth 
column.  If  absent,  but  represented  by  proxy,  the  number  of 
shares  owned  would  be  entered  in  the  fifth  column  and  the 
name  of  the  person  holding  the  proxy  in  the  sixth  column. 

In  this  manner  a  complete  record  of  the  stock  is  preserved. 
The  combined  footings  of  columns  four  and  five  give  the  num- 
ber of  shares  entitled  to  vote  at  the  meeting;  and  the  combined 
footings  of  three,  four  and  five,  must,  if  the  work  be  correct, 
give  the  total  stock  holdings  and  equal  the  footing  of  column 
two. 

Form  66. — Outline  Minutes  for  Annual  Meeting. 

OUTLINE  MINUTES. 

ANNUAL  MEETING  TERRE  BONNE  CEMENT   CO. 
To  be  Held  Jan.  24,  1903. 


Meeting  called  to  order  at A.  M.  by 

who  presided  over  meeting.  Officiating  Secretary 

Roll  Call.     (See  Secretary's  list  of  stockholders.     Form  65.) 

Notice  of  Meeting.  Copy  of  notice  submitted  with  Secretary's  certificate 
attached.  Ordered  spread  upon  minutes. 

Minutes  of  previous  meeting  read  and 


384  CORPORATE  MANAGEMENT. 

Annual  Reports. 

President's. 

Treasurer's. 

Committee  on  By-laws. 
Election  of  Directors. 

Inspectors  of  Election 

.  .and 


Inspectors  were  duly  sworn  and  conducted  the  election,  reporting  the 
following  results :  (Results  would  be  taken  from  Inspectors'  Certificate 
Form  68.) 

New  Business. 

Adjournment. 

These  outline  minutes  are  best  prepared  on  rough  sheets  of 
loose  paper,  with  ample  room  between  the  items  for  the  inter- 
polation of  any  comments  or  other  necessary  matter.  The  pro- 
ceedings of  the  annual  meeting  being  mainly  routine  are  well 
known  to  the  secretary,  and,  except  for  a  few  details,  such  as 
the  amount  of  stock  present,  exact  time  of  assembling,  etc.,  can 
be  noted  down  in  advance  with  considerable  accuracy.  If, 
through  unexpected  changes  in  the  programme,  any  portion  of 
the  outline  minutes  cannot  be  used,  the  secretary  has  merely  to 
draw  his  pencil  through  the  part  superseded  and  make  note  of 
the  changes.  Entirely  new  or  unexpected  business  may  be 
interpolated,  or  written  on  separate  sheets  of  paper,  and 
inserted  in  the  proper  place  in  the  outline  minutes.  Later  this 
rough  but  accurate  record  may  be  expanded  into  the  permanent 
minutes. 

By  the  use  of  outline  minutes  the  main  items  to  be  recorded 
are  provided  for  in  advance  and  the  secretary  is  relieved  from 
a  considerable  amount  of  routine  work.  This  gives  him  a  bet- 
ter opportunity  to  secure  an  accurate  record  of  results,  and  gives 
him  time  to  attend  to  the  many  other  duties  which  devolve 
upon  the  secretary  in  the  course  of  a  meeting.  (See  Chapter 
X;  also  §  143 ;  also  Form  98.) 


CHAPTER  XXIX. 
INSPECTORS'   OATHS   AND   CERTIFICATES. 


In  New  York  the  statutes  require  the  appointment  or  elec- 
tion of  inspectors  of  election,  whose  duties  are  to  take  entire 
charge  of  and  conduct  the  election  of  directors.  For  the  first 
annual  meeting  of  stockholders  these  inspectors  are  appointed 
by  the  board  of  directors.  Thereafter  they  are  elected  or 
appointed  as  may  be  prescribed  by  the  by-laws.  These  inspec- 
tors must  be  sworn  to  the  faithful  discharge  of  their  duties, 
and  are  required  to  prepare  a  certificate  showing  the  result  of 
the  election  conducted  by  them.  This  oath  and  certificate  must 
in  New  York  be  filed  with  the  Clerk  of  the  County  in  which  the 
election  is  held. 

The  New  York  forms  of  oath  and  certificate  for  inspectors 
of  elections  are  as  follows: 

Form  67. — Oath  of  Inspectors.    New  York. 

OATH  OF  INSPECTORS. 


STATE  OF  NEW  YORK,  1 
County  of  Albany,     )  w" 

We,  the  undersigned,  duly  appointed  to  act  as  inspectors  of  election 
at  the  Annual  Meeting  of  the  stockholders  of  the  Terre  Bonne  Cement 
Company,  to  be  held  at  the  office  of  said  Company,  138  State  Street,  Albany, 
New  York,  on  the  24th  day  of  January,  1903,  being  severally  duly  sworn, 
depose  and  say,  and  each  for  himself  deposes  and  says,  that  he  will  faithfully 
execute  the  duties  of  inspector  of  election  at  such  meeting  with  strict 
impartiality  and  according  to  the  best  of  his  ability. 

HENRY  M.  AMES. 
MORRIS  PEARRY. 

Severally  sworn  to  before  me  this  1 
24th  day  of  January,  1903.         j 

ELLISON  HAYNES, 
|  NOTARIAL  1  Notary  Public  for  Albany  County. 

\       SEAL.        ] 

15  225 


226  CORPORATE  MANAGEMENT 

Form  68. — Inspectors'  Certificate  of  Election.    New  York. 

CERTIFICATE  OF  INSPECTORS  OF  ELECTION. 


We,  the  undersigned,  the  duly  appointed  inspectors  of  election  of  the 
Terre  Bonne  Cement  Company  of  Albany,  New  York,  do  hereby  certify 
that  at  the  regular  annual  meeting  of  said  corporation,  held  at  the  office 
of  the  Company,  138  State  Street,  Albany,  New  York,  on  the  24th  day  of 
January,  1903,  a  quorum  being  present,  we,  being  first  duly  sworn  by  oath 
hereunto  annexed,  did  conduct  the  election  for  directors  of  said  corporation, 
and  that  the  result  of  the  vote  taken  thereat  was  the  election,  by  the  plurality 
vote  set  opposite  their  respective  names,  of  the  following  directors,  to  serve 
for  the  ensuing  year. 

VOTES 
NAMES.  RECEIVED. 

Ellis  T.  Percival 1,850 

Albert  M.  Rossmore 1,850 

Alfred  N.  Erricson 1,700 

James  F.  Gough 1,600 

Oliver  N.  Simpson 1,400 


In  Testimony  Whereof,  we  have  executed  this  certificate  this 
24th  day  of  January,  1903. 

HENRY  M.  AMES. 
MORRIS  PEARRY. 

STATE  OF   NEW   YORK,  )       . 
County  of  Albany,     j 

On  this  24th  day  of  January,  1903,  before  me  personally  came  Henry 
M.  Ames  and  Morris  Pearry,  to  me  known  to  be  the  persons  described  in 
and  who  executed  the  foregoing  certificate,  and  severally  acknowledged  that 
they  executed  the  same  for  the  uses  and  purposes  therein  set  forth. 

ELLISON  HAYNES, 

j  NOTARIAL  )  Notary  Public  for  Albany  County. 

(     SEAL.     ) 


The  inspector's  oath  and  certificate  are  either  arranged  on 
one  sheet  of  paper  or  on  attached  sheets  and  are  filed  together 
in  the  County  Clerk's  office. 

For  New  Jersey,  the  inspector's  oath  and  certificate  are  some- 
what different.  Neither  are  they  filed  in  the  County  Clerk's 
office,  but  are  merely  handed  the  secretary  when  complete  to  be 
filed  among  the  company  archives.  The  following  forms  are 
in  general  use : 


INSPECTORS'  OATHS  AND  CERTIFICATES.  227 

Form  69.  —  Oath  of  Inspectors.    New  Jersey. 

OATH  OF  INSPECTORS. 

STATE  OF  NEW  JERSEY,  | 
County  of  Hudson,    j  "••' 

We,  the  undersigned,  the  duly  appointed  inspectors  of  election  of  the 
Aztec  Mining  Company,  being  severally  sworn,  upon  our  respective  oaths 
do  undertake  and  swear  that  we  will  faithfully,  honestly  and  impartially 
perform  our  duties  as  inspectors  at  the  election  of  directors  of  said  Com- 
pany to  be  held  on  the  8th  day  of  January,  1903,  and  that  we  will  make 
a  true  report  of  the  results  of  said  election. 

THEODORE  REINHART. 
DANIEL  CULLOM. 

Subscribed  and  sworn  to  before  me  this  ) 
8th  day  of  January,  1903.  } 

HENRY  OSMUND, 
J  NOTARIAL  I  Notary  Public  for  Hudson  County. 

) 


SEAL. 


Form  70.  —  Inspectors'  Certificate  of  Election.    New  Jersey. 

INSPECTORS'  CERTIFICATE  OF  ELECTION. 


We,  the  undersigned,  inspectors  of  election  duly  appointed  to  conduct 
the  election  for  directors  of  the  Aztec  Mining  Company  at  the  meeting 
of  the  stockholders  thereof,  held  this  day  at  the  office  of  the  Company,  No. 
15  Exchange  Place,  Jersey  City,  New  Jersey,  do  hereby  certify  and  report 
that  we,  being  first  duly  sworn  by  oath  hereunto  annexed,  did  hold  and 
conduct  the  said  election  by  ballot  in  due  form  and  that  the  votes  cast 
thereat  were  as  follows: 

VOTES 
NAMES.  RECEIVED. 

James  H.  Allen 400 

Robert  Dunham 400 

Louis  Glasser 265 

Francis  Lathrop 240 

Morris  Levine 160 

Emmet  Wells 140 

Patrick  Keenan 135 

Samuel  S.  Steiner 135 

Sidney  Shepard 125 

In  Testimony  Whereof,  we  have  hereunto  affixed  our  respective 
signatures  Ihis  8th  day  of  January,  1903. 

THEODORE   REINHART. 
DANIEL  CULLOM. 

For  further  details  as  to  the  appointment  of  inspectors  and 
the  practice  where  tellers  are  appointed,  see  Sections  54,  102 
and  1 08.  (See  Forms  92,  93  and  98  for  entries  in  minutes.) 


CHAPTER  XXX. 
ANNUAL  REPORTS. 

The  present  chapter  treats  only  of  the  reports  made  to  the 
stockholders  at  their  annual  meeting.  These  reports  vary  so 
widely  according  to  the  conditions  that  any  forms  presented 
must  be  merely  suggestive. 

Annual  reports  to  stockholders  are  nearly  always  general  in 
their  character,  the  more  detailed  reports  being  usually  reserved 
for  the  directors  and  officers.  At  times,  however,  conditions 
will  arise  that  make  a  detailed  presentment  to  the  stockholders 
necessary  or  advisable,  or  the  stockholders  may  demand  a  full 
statement  of  any  particular  transactions  that  seem  to  require 
explanation  and  then  full  and  explicit  reports  must  be  made. 
(See§§  107,  125.) 

The  president's  report  (Form  71 )  is  intended  to  give  a  gen- 
eral view  of  the  company's  condition  and  should  present  any 
matters  of  unusual  importance  that  have  occurred  during  the 
year.  This  report  would  usually  be  read  by  the  president.  The 
treasurer's  report  would  be  presented  but  would  not  usually  be 
read  unless  such  reading  were  called  for.  All  reports  as 
received,  unless  otherwise  ordered  by  motion  or  by  direction  of 
the  president,  would  be  handed  the  secretary  and  be  filed  by 
him  for  preservation. 

Form  71. — President's  Annual  Report. 

PRESIDENT'S  ANNUAL  REPORT. 


To  the  Stockholders  of  the 

TERRE  BONNE  CEMENT  COMPANY. 

GENTLEMEN — It  gives  me  a  great  deal  of  pleasure  to  report  that  the 
general  condition  of  this  Company  is  much  better  now  than  it  was  one  year 
ago.  The  early  portion  of  the  year  was  marked  by  a  general  depression  in 

228 


ANNUAL  REPORTS.  229 

the  cement  trade,  the  price  of  Terre  Bonne  barreled  cement  running  down 
from  $1.58  to  $1.44.  A  very  unfortunate  strike  just  at  this  juncture  pre- 
vented the  filling  of  contracts  even  at  this  price,  and  later  resulted  in  several 
damage  suits  for  breach  of  contract.  These  were,  however,  compromised 
on  terms  quite  advantageous  to  the  Company,  without  extended  litigation. 

The  strike  itself  was  brought  to  a  settlement  by  concessions  on  both 
sides,  the  men  yielding  all  their  demands  except  as  to  the  hours  of  labor, 
the  Company  on  that  point  agreeing  to  reduce  the  working  day  from  ten 
hours  to  nine  hours  without  reduction  of  wages. 

Since  that  time  the  Company  has  enjoyed  a  period  of  uninterrupted  pros- 
perity. Terre  Bonne  Cement  rose  by  June  1st  to  $1.60  per  barrel,  which 
price  it  has  maintained.  Since  that  time  the  Company,  though  working 
its  plant  to  its  fullest  capacity,  has  been  entirely  unable  to  meet  the  demands, 
the  total  sales  for  1902  running  up  to  68,500  barrels,  as  against  44,000  barrels 
in  1901.  The  average  per  centum  of  profit  has  been  greater  in  1902  than  in 
1901,  the  net  receipts  for  1902,  after  deduction  of  all  fixed  charges,  repairs, 
maintenance,  office  expenses,  etc.,  aggregating  $38,286.12,  as  against  $21,500 
in  1901. 

Out  of  these  net  receipts  $15,500  has  been  set  aside  for  additional  equip- 
ment and  from  the  remaining  profits  $8,286.12  has  been  passed  to  the  reserve 
fund,  leaving  $15,000,  amounting  to  6%  upon  the  total  outstanding  stock 
of  the  Company,  available  for  dividends. 

In  conclusion,  I  would  state  that  the  Terre  Bonne  property  generally 
is  in  good  condition,  new  contracts  for  shipping  have  been  unusually 
favorable  to  the  Company,  its  relations  with  its  customers  are  entirely 
satisfactory,  and  the  outlook  for  the  ensuing  year  is  most  promising. 

Respectfully  submitted, 

ALBERT  M.  ROSSMORE, 

Albany,  New  York,  President. 

January  24,  1903. 

The  treasurer's  report  usually  consists  of  a  statement  of  the 
profit  and  loss  account  for  the  preceding  year,  together  with 
the  resources  and  liabilities  at  the  conclusion  of  such  year.  The 
treasurer  would  use  his  discretion  as  to  how  far  his  report  goes 
into  detail.  Frequently  business  prudence  forbids  any  detailed 
statement  to  the  stockholders  of  the  company. 

Form  72. — Treasurer's  Annual  Report. 

TREASURER'S  ANNUAL  REPORT. 


TERRE  BONNE  CEMENT  COMPANY. 


PROFIT    AND   LOSS    STATEMENT. 

January  i,  1903. 

Gains. 

68,500  bbls.  Cement,  $1.58 $108,230  oo 

Barreled  Cement  on  hand  in  excess  of  stock  of 

Jan.  i,  1902,  500  bbls.,  $1.0233 5"  65 


CORPORATE   MANAGEMENT. 


Receipts  from  Miscellaneous  Sources 

Material  on  hand  in  excess  of  stock  of  Jan.  i,  1902 

Expenditures. 

Materials  

Labor   

Superintendence   

Salaries   

Office  Expenses 

Supplies 

Repairs    

Taxes  

Insurance  

General  Expenses  

Freight 

Settlement  of  Suits.. . 


$250  25 
2,150  50 


$30,421  39 
21,549  30 
1,700  oo 
4,391  oo 
1,414  24 
1,386  18 

6,i49  95 
642  19 

1,020  08 

831  45 

I,IOO  OO 

2,250  50 


$111,142  40 


72,856  28 

$38,286  12 


STATEMENT  OF  ASSETS  AND  LIABILITIES. 

Assets. 

Plant,  including  Marl  Beds  and  other  Realty $250,000  oo 

Cash  30,436  35 


Office  Fixtures  and  Supplies. 

Accounts  Receivable 

Cement,  1,500  bbls.,  $1.0233 

Clay,  10,830  yds.,  $0.7593 

Plaster,  101.85  tons,  $5.60 

Coal,  452.75  tons,  $2.20 

Coke,  399-75  tons,  $4-i5--  •  -. 

Insurance,  unearned  premiums. 


1,500  oo 
18,125  oo 

i,534  95 
8,223  15 

570  35 

996  05 

1,658  50 

524  20 


$313,568  55 


Liabilities. 

Accounts  Payable $8,75O  oo 

Capital  Stock 250,000  oo 

Reserve  Fund  24,818  55 

Equipment  Account 15,000  oo 

Dividends  Unpaid 15,000  oo 


$313,568  55 


Respectfully  submitted, 


Albany,  New  York, 

January  24,  1903. 


ELLISON  HAYNES, 

Treasurer. 


ANNUAL  REPORTS.  231 

Form  73. — Report  of  Committee  on  By-laws. 

REPORT  OF  COMMITTEE  ON  BY-LAWS. 


To  the  Stockholders  of  the 

TERRE  BONNE  CEMENT  COMPANY  : 

GENTLEMEN — Your  committee  appointed  at  the  last  annual  meeting  of 
the  stockholders  to  report  any  needed  amendments  or  changes  in  the  by-laws 
of  this  Company  beg  to  submit  the  following : 

1.  We  would  recommend  the  addition  of  a  by-law  providing  for 
an  Executive  Committee  to  consist  of  three  members  of  the  Board  of 
Directors ;  such  Committee  to  have  full  control  of  the  general  busi- 
ness affairs  of  the  Company  in  the  interim  between  meetings  of  the 
Board. 

2.  We  would  recommend  that  the  present  by-law  relating  to  the 
regular  meetings  of  the  Board  of  Directors  be  so  changed  as  to  pro- 
vide for  quarterly  meetings  of  the  Board  instead  of  monthly  meetings 
as  at  present. 

3.  We  strongly  disapprove  of  the  suggested  amendment  to  the 
by-laws  whereby  the  amount  of  indebtedness  which  may  be  incurred 
by  the  Directors  on  behalf  of  the  Company  at  any  one  time  is  in- 
creased from  $10,000  to  $25,000,  as  we  believe  such  change  to  be  not 
only  unnecessary,  but  against  the  interests  of  the  Company. 

Respectfully  submitted, 

JAMES  F.  GOUGH, 
HARKNESS  B.  LEWIS, 
OLIVER  N.  SIMPSON, 

Committee  on  By-laws. 
Albany,  New  York, 

January  24,  1903. 


CHAPTER  XXXI. 
CALLS  AND   WAIVERS. 


Calls  and  waivers  are  used  to  assemble  stockholders  or 
directors,  as  the  case  may  be,  in  special  meeting.  Such 
meetings  are  necessary  only  when  some  contingency  or 
emergency  arises  calling  for  special  or  immediate  action.  In 
such  case,  the  call  and  waiver,  or  the  call  with  notice,  or  the 
waiver  alone,  as  the  circumstances  may  demand,  must  be 
used  as  the  only  legal  means  by  which  the  special  meeting 
may  be  assembled.  Calls  and  waivers  are  never  used  to 
assemble  regular  meetings  which  meet  at  the  times  and 
places  designated  by  the  charter  or  by-laws  and  with  such 
notice  to  the  stockholders  as  may  be  specified  therein. 

In  the  first  meetings  of  a  company,  calls  and  waivers  play  a 
very  important  part.  After  the  granting  of  its  charter  and 
until  its  organization  is  perfected,  the  corporation  is  a  legal 
entity,  entitled  to  all  corporate  rights  and  privileges,  but  totally 
unprovided  with  the  machinery  through  which  these  are  ordi- 
narily secured.  At  this  stage  the  corporation  has  neither  by- 
laws, directors  nor  officers.  It  is  merely  an  unorganized 
group  of  stockholders  possessed  of  certain  charter  rights  as 
a  basis  upon  which  to  build  up  an  organization. 

These  first  calls  and  waivers  summon  stockholders  and 
directors  for  their  initial  meetings,  and,  signed  by  all  the  par- 
ties concerned,  waive  all  statutory  rights  the  parties  would 
otherwise  have  to  more  formal  notice  of  these  meetings.  Such 
meetings  held  in  accordance  with  the  terms  of  their  calls  and 
waivers,  are  strictly  legal  and  give  to  stockholders  and  direc- 
tors the  opportunity  to  perfect  the  organization  of  the  company. 


CALLS  AND  WAIVERS.  233 

The  following  form  of  call  and  waiver  serves  for  any  state, 
is  short  and  simple  and  entirely  sufficient  for  small  companies, 
or  for  larger  companies  where  no  specially  important  action 
is  contemplated.  It  must  be  signed  by  all  the  incorporators 
as,  should  one  signature  be  missing,  the  entire  action  of 
the  meeting  called  by  such  defective  instrument  might  be 
invalidated. 

Form  74. — First  Meeting  of  Stockholders.    Short. 

• 

CALL  AND  WAIVER  OF  NOTICE 

for 
FIRST  MEETING  OF  STOCKHOLDERS. 


We,  the  undersigned,  being  all  the  incorporators  and  stockholders 
of  the  Sheldon  Coffee  Roasting  Company,  dp  hereby  call  the  first  meet- 
ing of  the  stockholders  thereof,  to  be  held  in  the  office  of  Grenville  C. 
Sheldon,  20  Broad  Street,  New  York  City,  Jan.  isth,  1903,  at  3  P.  M.,  for 
the  organization  of  the  Company  and  the  transaction  of  all  such  business 
as  may  be  incident  thereto,  and  we  hereby  waive  all  requirements  as  to 
notice  of  such  meeting  and  consent  to  the  transaction  thereat  of  any  and 
all  business  pertaining  to  the  affairs  of  the  Company. 

New  York,  ELLIS  C.  SHELDON. 

Jan.  15,  1903.  WILLIAM  C.  GAINES. 

HENRY  WADSWORTH. 

Where  important  action  is  to  be  taken  at  the  first  stock- 
holders' meeting,  a  more  formal  call  and  waiver  should  be 
employed,  stating  specifically  the  important  matters  to  be  con- 
sidered. The  following  form  for  a  corporation  organized  in 
New  York  complies  with  these  conditions : 

Form  75. — First  Meeting  of  Stockholders.    Full  Form. 

CALL  AND  WAIVER  OF  NOTICE 

for 
FIRST  MEETING  OF  STOCKHOLDERS. 


We,  the  undersigned,  being  all  the  incorporators  of  the  Marston 
Manufacturing  Company  and  all  the  subscribers  to  its  capital  stock 
entitled  to  notice  of  said  meeting,  do  hereby  call  the  first  meeting  of  the 
stockholders  of  said  corporation,  to  be  held  in  the  office  of  Morris  P. 
Marston,  165  Grand  Avenue,  Brooklyn,  New  York,  at  10  A.  M.  on  the 
loth  day  of  June  1903.  for  the  purpose  of  receiving  charter,  adopting 


234  CORPORATE  MANAGEMENT 

by-laws,  considering  and  acting  upon  a  proposal  for  the  issue  of  the 
entire  capital  stock  of  the  company  in  exchange  for  property,  and  the 
doing  of  all  such  other  things  as  may  be  necessary  or  desirable  in  con- 
nection with  the  organization  of  said  corporation,  and  we  hereby  waive 
all  requirements  as  to  notice  or  publication  of  the  time,  place  and  pur- 
poses of  this  first  meeting,  and  consent  to  the  transaction  thereat  of  any 
and  all  business  pertaining  to  the  affairs  of  the  Company. 

New  York  City,  MORRIS  P.   MARSTON. 

June  10,  1903.  HENRY   CORNELL. 

JOHN  ADAMS. 
WILLIAM  B.  AMES. 

As  the  directors  for  the  first  year  are,  in  New  York  corpora- 
tions, appointed  by  the  charter,  the  election  of  directors  is 
omitted  in  the  above  form  from  the  specifications  of  business 
to  be  transacted.  Where  the  form  is  used  in  other  states,  this 
item  should  be  supplied;  the  purpose  clause  then  reading  as 
follows : 

"  for  the  purpose  of  receiving  charter,  adopting  by-laws, 
electing  directors,  considering  and  acting  upon  a  propo- 
sition, etc." 

Form  76. — First  Meeting  of  Directors. 

CALL  AND  WAIVER  OF  NOTICE 

for 
FIRST  MEETING  OF  DIRECTORS. 


We,  the  undersigned,  being  all  the  directors  of  the  Marston  Manu- 
facturing Company,  do  hereby  call  the  first  meeting  of  the  Directors  of 
said  Company,  to  be  held  in  the  office  of  Morris  P.  Marston,  165  Grand 
Avenue,  Brooklyn,  N.  Y.,  at  11  A.  M.,  on  the  loth  day  of  June,  1903,  for 
the  purpose  of  electing  officers  of  the  Company,  acting  upon  a  proposi- 
tion to  exchange  property  for  the  stock  of  the  Company  and  doing  all 
such  other  things  as  may  be  necessary  or  desirable  in  connection  with  the 
organization  of  the  Company  or  for  the  promotion  of  its  business,  and 
we  hereby  waive  all  statutory  and  by-law  requirements  as  to  notice  of 
time,  place  and  objects  of  this  meeting  and  consent  to  the  transaction 
thereat  of  any  and  all  business  pertaining  to  the  affairs  of  the  Company. 

New  York  City,  MORRIS   P.  MARSTON. 

June  10,  1903.  HENRY  CORNELL. 

JOHN  ADAMS. 

The  New  Jersey  form  of  call  and  waiver  for  first  meeting 
of  directors  would  be  similar  to  the  above,  which  is  a  general 


CALLS  AND  WAIVERS.  28f 

form  applicable  to  any  state.  It  should  be  noted  that  in  all  calls 
and  waivers,  the  signature  of  every  party  affected  is  required. 
If  even  one  were  omitted,  the  party  omitted  might  successfully 
contest  the  validity  of  action  taken  at  the  meeting  assembled 
by  such  incomplete  call  and  waiver. 

Special  Meetings. 

Special  meetings  of  stockholders  may  be  assembled  either 
by  call  and  waiver,  or  if  so  provided  in  charter  or  by-laws,  as 
is  usually  the  case,  by  a  call  signed  by  the  proper  officials  or 
persons  and  filed  with  the  secretary,  who  thereupon  sends  out 
notices  of  the  meeting  to  the  stockholders. 

Where  all  the  parties  in  interest  are  readily  accessible  and 
are  mutually  desirous  or  willing  that  a  special  meeting  shall  be 
held,  the  call  and  waiver  is  used  to  advantage  as  a  substitute 
for  the  call  with  its  subsequent  notice  which  must  otherwise 
be  employed.  The  call  and  waiver  states  the  time,  place  and, 
in  general,  the  purposes  of  the  meeting,  and  in  addition  con- 
tains a  waiver  of  the  usual  notice  of  such  meeting.  This  call 
and  waiver  is  signed  by  all  the  parties  in  interest,  and  permits 
of  an  immediate  meeting.  All  the  interested  parties  having 
waived  their  rights  to  the  usual  notice  of  time,  place  and  pur- 
poses of  meeting,  no  subsequent  objection  to  any  proper  pro- 
ceedings at  such  meeting  could  be  made. 

Examples  of  the  call  and  waiver  as  used  to  assemble  the 
first  meetings  of  stockholders  and  directors  have  already  been 
given.  (Forms  74,  75,  76.)  The  call  and  waiver  for  a  stock- 
holders' meeting  assembled  to  discuss  and  act  upon  a  propo- 
sition to  sell  the  entire  assets  of  the  company  is  as  follows : 

Form  77. — Special  Meeting  of  Stockholders. 

THE  CARONDELET  SILK  COMPANY. 


CALL  FOR  SPECIAL  MEETING  OF  STOCKHOLDERS. 


We,  the  undersigned,  being  all  of  the  stockholders  of  the  Carondelet 
Silk  Company  of  Paterson,  N.  J.,  hereby  call  a  special  meeting  of  the 


236  CORPORATE  MANAGEMENT. 

stockholders  of  said  Company  to  be  held  in  the  Company's  office,  No. 
145  Main  Street,  Paterson,  N.  J.,  at  10  A.  M.  on  the  2Oth  day  of  August, 
1903,  for  the  purpose  of  considering  and  acting  upon  a  proposition  for 
the  sale  of  the  entire  assets  of  the  Company,  and  we  hereby  waive  all 
statutory  and  by-law  requirements  as  to  notice  of  time,  place  and  objects 
of  said  meeting,  and  agree  to  the  transaction  thereat  of  any  and  all 
business  pertaining  to  the  affairs  of  the  Company. 

Paterson,  New  Jersey,  SARGENT  P.  WYLIE. 

Aug.  17,  1903.  JAMES  P.  HARMON. 

JOHN  B.  GOODELL. 
WILLIS  S.  BAKER. 
HENRY  BUCHANAN. 
WILLIAM  PERKINS. 
SAMUEL  T.  ADAMS. 
WELDON  P.  HUNT. 
JOHN  F.  ALDRICH. 
JOHN  F.  GOWEY. 
JOHN   T.   HARKNESS. 


Special  meetings  of  the  board  of  directors  are  also  assem- 
bled by  call  and  waiver  where  it  is  desirable  to  save  the  time 
involved  in  issuing  formal  notices  to  the  membership.  The 
form  in  such  cases  would  be  as  follows : 


Form  78. — Special  Meeting  of  Directors. 

THE  NELSON  CARBIDE  COMPANY. 
CALL  FOR  SPECIAL  MEETING  OF  DIRECTORS. 


We,  the  undersigned,  being  all  the  Directors  of  the  Nelson  Carbide 
Company  of  New  York  City,  hereby  call  a  special  meeting  of  the  Board 
of  Directors  of  said  Company  to  be  held  in  the  Company's  office,  173 
Duane  Street,  New  York  City,  on  March  10,  1903,  at  3  P.  M.,  to  elect 
a  Treasurer  of  the  Company  and  to  transact  any  other  necessary  busi- 
ness in  connection  therewith,  and  we  hereby  waive  all  statutory  and  by- 
law requirements  as  to  notice  of  time,  place  and  purposes  of  said  meet- 
ing and  consent  to  the  transaction  thereat  of  any  and  all  business  pertaining 
to  the  affairs  of  the  Company. 

New  York  City,  JAMES  B.  WILSON. 

March  9,  1903.  HENRY  ATTERBURY 

WILSON  WILLIAMS. 
BROWNELL  J.  BYRNES. 
MORRIS  HASSELL. 


CALLS  AND  WAIVERS.  287 

Consent   Meetings. 

The  waiver  alone  is  but  seldom  used  and  only  where  all 
the  parties  interested — as  for  example,  all  the  members  of  a 
board  of  directors — find  themselves  together  and  then  and 
there  agree  to  waive  all  the  usual  formalities  and  hold  an 
immediate  meeting.  Such  meetings  are  sometimes  called 
"  consent  meetings,"  are  entirely  legal,  and  are  not  uncom- 
mon where  boards  of  directors  are  composed  of  but  few 
members,  or  where  executive  committees  are  small  and 
easily  assembled.  For  the  larger  boards  of  directors  and 
for  stockholders'  meetings  the  method  is  seldom,  if  ever, 
used.  For  a  "  consent  meeting,"  a  written  waiver  signed  by 
all  the  parties  entitled  to  be  present  is  not  strictly  necessary. 
The  presence  and  participation  of  all  of  them,  recorded  in 
the  minutes  of  the  meeting,  is  sufficient  legal  evidence  of 
their  consent  thereto,  and  estops  any  subsequent  objection 
to  the  proceedings.  Usually,  however,  in  case  of  a  consent 
meeting  of  the  directors,  the  secretary  should  prepare  and 
have  signed  by  all  the  members  of  the  board  a  waiver  or 
agreement  to  the  meeting,  which  may  be  filed  and  is  in  itself 
conclusive  proof  of  the  legality  of  such  meeting.  Such 
waiver  would  be  as  follows: 

Form  79. — Special  Meeting  of  Directors.    By  Consent. 
THE    NELSON    CARBIDE    COMPANY. 


WAIVER  FOR   CONSENT  MEETING. 


We,  the  undersigned,  being  all  of  the  Directors  of  the  Nelson  Carbide 
Company,  and  all  being  present,  do  hereby  consent  to  an  immediate 
meeting  of  the  Board  of  Directors  of  said  Company  to  be  held  in  the 
office  of  Morris  Hassell,  No.  253  Broadway,  New  York,  this  loth  day  of 
March,  1903,  at  3  P.  M.,  for  the  purpose  of  electing  a  Treasurer  of  the 
Company  and  for  the  transaction  of  any  and  all  other  business  that  may 
come  before  said  meeting,  and  we  hereby  waive  notice  of  such  meeting 
and  agree  to  the  transaction  thereat  of  any  and  all  business  pertaining 
to  the  affairs  of  the  Company. 

New  York  City,  JAMES  B.  WILSON. 

March  10,  1903.  HENRY  ATTERBURY. 

WILSON  WILLIAMS. 
BROWNELL  J.  BYRNES. 
MORRIS  HASSELL. 


CHAPTER  XXXII. 
CALLS. 


In  the  larger  corporations  the  assembling  of  the  stock- 
holders in  special  meeting  by  means  of  the  call  and  waiver  is 
nearly  always  impracticable  on  account  of  the  number  of 
stockholders  and  the  difficulty  of  getting  all  to  sign.  In 
such  cases  the  meeting  must  be  formally  called  as  prescribed 
by  the  laws  of  the  state,  or  the  by-laws  of  the  particular 
company.  The  call,  followed  by  notice  of  the  meeting,  is 
the  usual  method. 

The  call  itself  is  merely  an  authorization  or  direction  to 
the  president  or  to  the  secretary  to  notify  the  stockholders 
of  a  special  meeting  which  is  to  be  held  in  accordance  with 
the  terms  of  such  call.  It  must  be  signed  by  the  parties 
designated  thereto  in  the  by-laws — usually  the  president,  or 
two  or  more  directors,  sometimes  by  a  certain  proportion  in 
interest  of  the  stockholders. 

If  the  call  is  properly  signed  and  is  directed  to  the  secre- 
tary, this  latter  official  prepares  notices  of  the  meeting 
authorized  thereby  and  sends  them  out  to  the  stockholders, 
these  notices  being  the  direct  means  whereby  the  stock- 
holders are  assembled.  If  the  call  is  directed  to  the  presi- 
dent and  is  in  due  form,  this  official  endorses  the  call  and 
turns  it  over  to  the  secretary,  whereupon  it  becomes  the  duty 
of  the  latter  to  send  out  the  formal  notice  of  the  meeting 
authorized  by  such  call. 

The  form  of  call  signed  by  the  president  is  as  follows : 


238 


CALLS. 


Form   80.— President's    Call   for   Special    Meeting  of   Stock- 
holders. 


THE  CARONDELET  SILK  COMPANY. 


PATERSON,  New  Jersey, 

August  12,  1903. 
Mr.  JOHN  T.  HARKNESS, 

Secretary  of  the  CARONDELET  SILK  Co., 

145  Main  St.,  Paterson,  New  Jersey: 

DEAR  SIR — In  accordance  with  the  authority  vested  in  me  by  the  by-laws 
of  this  Company,  I  hereby  call  a  special  meeting  of  its  stockholders,  to 
be  held  in  the  office  of  the  Company,  No.  145  Main  St.,  Paterson,  N.  J., 
on  the  2oth  day  of  August,  1903,  at  10  A.  M.,  for  the  purpose  of  consider- 
ing and  acting  upon  a  proposition  to  sell  the  entire  assets  of  the  Com- 
pany, and  for  the  transaction  of  any  and  all  business  in  connection  there- 
with that  may  properly  come  before  said  meeting,  and  I  hereby  authorize 
and  instruct  you  to  send  out  notices  of  said  meeting  to  the  stockholders 
of  this  Company  in  accordance  with  the  requirements  of  its  by-laws. 

Yours  very  truly, 

JOHN  F.  GOWEY, 

President. 


Thp  above  call  is  formal  and  would  be  handed  or  sent  by 
the  president  to  the  secretary  of  the  company.  This  latter 
official  would  then  send  out  notices  of  the  meeting  to  the 
stockholders.  (See  Form  85.) 

Both  the  call  and  notice  must  contain  the  three  essentials 
of  time,  place  and  purpose,  and  the  omission  of  any  one 
would  be  fatal. 

The  form  of  call  when  signed  by  two  or  more  directors 
would  be  as  follows : 

Form  81. — Directors'  Call  for  Special  Meeting  of  Stockholders. 
CALL  FOR  SPECIAL  MEETING  OF  STOCKHOLDERS. 


We,  the  undersigned,  Directors  of  the  Carondelet  Silk  Company,  do 
hereby  call  a  special  meeting  of  its  stockholders  to  be  held  in  the  office 
of  the  Company,  145  Main  Street,  Paterson,  New  Jersey,  on  the  2Oth 
day  of  August,  1903,  at  10  A.  M.,  for  the  purpose  of  considering  and 


240  CORPORATE  MANAGEMENT. 

acting  upon  a  proposition  to  sell  the  entire  assets  of  the  Company  and 
for  the  transaction  of  any  and  all  business  necessary  or  desirable  in  con- 
nection therewith;  and  we  hereby  authorize  and  instruct  the  Secretary  of 
the  Company  to  send  out  notices  of  said  special  meeting  in  accordance 
with  the  by-law  requirements  of  this  Company. 

Paterson,  New  Jersey.  WELDON   P.   HUNT. 

August  12,  1903.  SAMUEL    T.    ADAMS. 

To  Mr.  JOHN  T.  HARKNESS, 

Secretary  of  the 

CARONDELET  SILK  COMPANY. 


This  call,  as  in  the  case  of  the  president's  call,  would  be 
handed  to  the  secretary,  to  be  followed  by  the  secretary's 
notice  of  the  meeting. 

The  form  of  resolution  where  a  special  meeting  is  called 
by  formal  action  of  the  board  of  directors  is  given  in  Form 
39.  Upon  the  passage  of  such  resolution,  it  would  at  once 
become  the  secretary's  duty  to  send  out  notices  of  the  meet- 
ing authorized  thereby. 

Frequently  the  by-laws  provide  that  the  president  upon 
the  formal  written  request  of  a  specified  proportion  of  the 
stockholding  interests  shall  call  a  special  meeting  of  the 
stockholders  to  consider  such  matters  as  are  enumerated  in 
the  stockholders'  request.  The  form  of  stockholders'  re- 
quest would  be  as  follows: 


Form  82. — Stockholders'  Request  for  Special  Meeting  of  Stock- 
holders. 


STOCKHOLDERS'  CALL. 

To  the  President  of  the 

CARONDELET  SILK  COMPANY: 

We,  the  undersigned,  owning  or  controlling  not  less  than  two-thirds 
of  the  entire  voting  stock  of  the  Carondelet  Silk  Company,  do  hereby 
request  you  to  call  a  special  meeting  of  the  stockholders  of  this  Com- 
pany to  be  held  in  the  office  of  the  Company,  143  Main  Street,  Paterson, 
New  Jersey,  at  10  A.  M.  on  the  2oth  day  of  August,  1903,  for  the  purpose 
of  considering  and  acting  upon  a  proposition  to  sell  the  entire  assets  of  the 


CALLS.  341 

Company  and  for  the  transaction  of  all  such  business  in  connection  there- 
with as  may  be  necessary  or  desirable. 

Paterson,  New  Jersey,  WILLIS  S.  BAKER,   owning  150  shares. 

August  12,  1903.        JAMES  P.  HARMON,  200      " 

SARGENT  P.  WYLIE,  150 

SAMUEL  T.  ADAMS,  100 

JOHN  F.  ALDRICH,     '  250 

WELDON  P.  HUNT,  200 

JOHN  B.  GOODELL,  150 

JOHN  T.  HARKNESS,  100 

WILLIAM  PERKINS,  100 


In  some  corporations  the  stockholders'  request,  signed 
by  a  prescribed  majority  of  the  stockholders  in  interest,  is 
the  usual  preliminary  to  the  call  for  a  special  meeting. 
Usually,  however,  much  simpler  methods  are  prescribed  in 
the  by-laws  whereby  a  special  meeting  may  be  called,  and 
the  stockholders'  request  is  only  resorted  to  where  the  presi- 
dent or  directors  are  not  inclined  to  assume  the  responsi- 
bility of  assembling  such  meeting,  or  are,  for  some  reason, 
opposed  thereto. 

Form  83. — President's  Endorsement  of  Stockholders'  Request. 

To  the  Secretary  of  the 

CARONDELET  SILK  COMPANY: 

In  compliance  with  the  foregoing  request,  and  for  the  purposes  set 
forth  therein,  you  are  hereby  instructed  to  send  out  notices  in  accord- 
ance with  the  by-law  requirements  of  the  Company,  for  a  special  meeting 
of  its  stockholders  to  be  held  in  the  office  of  the  Company  at  10  A.  M.  on 
the  20th  day  of  August,  1903. 

Paterson,  New  Jersey,  JOHN  F.  GOWEY, 

August  12,  1903.  President. 

The  stockholders'  request  for  meeting,  endorsed  with  the 
president's  instructions  as  above,  would  then  be  handed  or 
sent  to  the  secretary,  who  in  compliance  with  its  instructions 
would  send  out  notices  of  the  desired  meeting.  (See  Form 

85.) 

Where  the  by-laws  provide  that  a  meeting  may  be  called 
by  a  certain  number  of  the  stockholders,  or  by  a  certain  pro- 
portion of  the  voting  stock,  without  the  intervention  of  the 
16 


342  CORPORATE  MANAGEMENT. 

president,  the  call  would  be  similar  to  Form  81,  the  phrase 
"  Directors  of  the,  etc."  being  changed  to  "  Stockholders  of 
the,  etc.,"  followed  by  the  number  of  shares  controlled.  This 
would  be  handed  direct  to  the  secretary,  and  would  be  the 
secretary's  authority  for  issuing  his  notices. 

Directors'  Meetings. 

The  call  is  frequently  used  in  assembling  the  directors  in 
special  meeting,  though  the  number  of  directors  being  small 
the  call  and  waiver  may  be  readily  employed,  (See  Form 
78)  or  the  board  may  be  assembled  at  any  time  without 
notice  by  consent  of  all  its  members.  (See  Form  79.) 

The  call  for  directors'  special  meetings  must  be  signed 
as  provided  in  the  by-laws — usually  by  the  president  or  a 
certain  number  of  the  directors. 

The  president's  call  for  a  special  meeting  of  directors 
would  be  as  follows : 

Form  84. — President's  Call  for  Special  Meeting  of  Directors. 

NELSON    CARBIDE   COMPANY, 
173  Duane   St.,   New   York. 

MARCH  2,  1903. 
To  the  Secretary  of  the 

NELSON   CARBIDE  COMPANY  : 

In  accordance  with  the  authority  vested  in  me  by  the  by-laws  of  this 
Company,  I  hereby  call  a  special  meeting  of  the  Board  of  Directors  to 
be  held  in  the  office  of  the  Company  at  3  P.  M.,  upon  the  loth  day  of 
March,  1903,  for  the  purpose  of  acting  upon  the  resignation  of  the 
Treasurer  of  the  Company,  Mr.  John  Wells,  for  the  election  of  his  suc- 
cessor and  for  the  transaction  of  any  other  business  in  connection  there- 
with that  may  be  necessary;  and  you  are  hereby  instructed  to  send  out 
notices  of  said  meeting  as  required  by  the  by-laws  of  this  Company. 

HENRY  ATTERBURY, 

President. 

This  call  would  have  to  be  issued  at  a  much  earlier  date 
than  would  be  the  case  with  the  call  and  waiver  (See  Form 
78)  in  order  to  give  the  secretary  proper  time  to  get  out  his 


CALLS.  243 

notices.  The  call  would  be  handed  to  the  secretary,  who 
would,  in  accordance  with  its  instructions,  follow  it  up  with 
due  notice  of  the  meeting.  (See  Form  89.) 

A  director's  call  for  special  meeting  of  the  board  would 
be  similar  in  form  to  the  directors'  call  for  stockholders' 
special  meeting  (See  Form  81)  and  would  usually  be  handed 
to  the  secretary  direct  without  passing  through  the  hands  of 
the  president. 


CHAPTER  XXXIII. 
NOTICES   OF  MEETINGS. 


Notices  of  regular  meetings  are  usually,  and  should 
always  be,  required  by  the  by-laws.  If  not  so  required,  the 
secretary  is  under  no  obligation  to  send  them  out. 

Special  meetings  always  require  notice.  Such  notices 
are  sent  out  pursuant  to  the  call  by  which  the  meeting  is 
authorized  and  such  number  of  days  before  the  meeting  as 
required  by  the  by-laws. 

The  following  form  for  notice  of  special  meeting  of  stock- 
holders is  general  and  may  be  used  under  almost  any  circum- 
stances. The  nature  of  the  call  under  which  it  is  issued 
should  always  be  stated  in  the  notice. 

The  notice  given  below  may  be  used  as  shown,  or  with 
the  name  and  address  of  the  particular  stockholder  omitted. 
This  latter  practice  is  common  where  the  notices  are  printed, 
the  address  appearing  only  on  the  envelope  in  which  the 
notice  is  enclosed.  Frequently  the  notice  is  printed  on  a 
postal  card,  in  which  case  the  address  appears  only  on  the 
face  of  the  card.  The  publication  notice  (See  Form  86)  may 
also  be  printed  or  written  and  used  in  this  manner  as  a  per- 
sonal notice  of  meeting. 

Form   85. — Notice  of   Meeting.     Special   Meeting  of   Stock- 
holders. 


THE  CARONDELET  SILK  COMPANY. 

TERSON,    NI 

August  14,  1963. 


PATERSON,  New  Jersey, ) 


Mr.  SARGENT  P.  WYLIE, 

Montclair,  New  Jersey : 

DEAR  SIR — You  are  hereby  notified  that,  pursuant  to  the  call  of  the 
President,  a  special  meeting  of  the  stockholders  of  the   Carondelet   Silk 

244 


NOTICES  OF  MEETINGS.  245 

Company  will  be  held  in  the  Company's  office,  No.  145  Main  Street,  Pater- 
son,  New  Jersey,  August  2oth,  1903,  at  10  A.  M.,  for  the  purpose  of  consider- 
ing and  acting  upon  a  proposition  to  sell  the  entire  assets  of  the  Company, 
and  for  the  transaction  of  any  and  all  business  necessary  or  desirable  in 
connection  therewith. 

Yours  very  truly, 

JOHN  T.  HARKNESS, 

Secretary. 

Notices  of  special  meetings  must  contain  the  three  essen- 
tials of  time,  place  and  purpose,  should  specify  by  what 
authority  they  are  issued,  and  should  be  sent  to  every  stock- 
holder of  the  company.  The  omission  of  any  one  stock- 
holder, or  a  failure  to  send  the  notices  the  required  numner 
of  days  before  the  meeting,  might  vitiate  the  entire  proceed- 
ings of  such  meeting. 

If  the  notice  were  to  be  published  in  the  local  papers,  or 
a  printed  notice  prepared  to  be  sent  out,  as  is  sometimes 
done  by  the  larger  corporations,  the  form  would  be  about  as 
follows : 

Form   86. — Publication  Notice.     Special   Meeting    of  Stock- 
holders. 

THE   CARONDELET    SILK    COMPANY. 


Notice  is  hereby  given  that  a  special  meeting  of  the  stockholders  of 
the  Carondelet  Silk  Company  will  be  held  in  the  Company's  office,  No. 
145  Main  St.,  Paterson,  New  Jersey,  August  2Oth,  1903,  at  10  A.  M.,  for  the 
purpose  of  considering  and  acting  upon  a  proposition  to  sell  the  entire 
assets  of  the  Company,  ana  for  the  transaction  of  any  and  all  businesi 
necessary  or  desirable  in  connection  therewith. 

By  order  of  the  President. 

JOHN  T.  HARKNESS, 

Secretary. 
Paterson,  New  Jersey, 

August  14,  1903. 

Annual  meetings  of  stockholders  are  held  at  the  time 
and  place  fixed  by  the  by-laws  and  any  and  all  business 
proper  for  consideration  by  the  stockholders  may,  without 
mention  in  the  notice,  be  transacted  at  such  meetings. 

Notice  of  the  annual  meeting  must  be  sent  out  by  the 


246  CORPORATE  MANAGEMENT. 

secretary  a  certain  number  of  days  before  the  meeting,  the 
precise  number  of  days  being  determined  by  the  by-laws. 
This  notice,  which  is  sent  to  every  stockholder  of  record, 
would  be  as  follows : 


Form  87. — Notice.    Annual  Meeting  of  Stockholders. 

TERRE    BONNE    CEMENT    COMPANY, 
138  State  Street,  Albany,  New  York. 

JANUARY  3,  1903. 
Mr.  JOHN  T.  ADAMS, 

163  Capitol  Street,  Albany,  N.  Y. : 

DEAR  SIR — You  are  hereby  notified  that  the  Annual  Meeting  of  the 
stockholders  of  the  Terre  Bonne  Cement  Company  will  be  held  in  the 
Company's  office  at  10  A.  M.,  Tuesday,  January  24th,  1903,  for  the  elec- 
tion of  directors  and  the  transaction  of  such  other  business  as  may 
come  before  the  meeting. 

Respectfully, 

JAMES  B.  ALLEN, 

Secretary. 

In  New  York  State,  the  statutes  require  publication  of 
the  time  and  .place  of  any  election  of  directors,  and,  as 
directors  are  elected  at  the  annual  meeting  of  stockholders, 
it  follows  that  the  annual  meeting  should  properly  be  an- 
nounced by  publication.  There  is,  however,  no  direct  pen- 
alty for  failure  to  so  announce  the  annual  meeting;  and  the 
smaller  corporations  quite  generally  disregard  the  statute 
requirements,  preferring  the  ordinary  notice  by  mail  as 
simpler,  more  effective  and  cheaper.  Provided  due  notice 
of  such  annual  meeting  be  given  the  stockholders  in  other 
ways,  it  is  not  probable  that  an  election  of  directors  held 
thereat  could  be  successfully  attacked  for  failure  to  observe 
the  statutory  requirements  as  to  publication.  (See  §  52.) 

In  the  larger  corporations  the  statutory  requirements  are 
generally  observed.  The  following  form  of  notice  is  com- 
monly used : 


NOTICES   OF   MEETINGS.  247 

Form   88. — Publication   Notice.     Annual   Meeting  of   Stock- 
holders. 


TERRE   BONNE   CEMENT  COMPANY. 


The  Annual  Meeting  of  the  Stockholders  of  the  Terre  Bonne  Cement 
Company  will  be  held  at  the  office  of  the  Company,  138  State  Street, 
Albany,  New  York,  January  24th,  1903,  at  10  A.  M.,  for  the  purpose  of 
electing  directors  and  for  the  transaction  of  such  other  business  as  may 
be  brought  before  said  meeting. 

The  stock  transfer  books  of  the  Company  will  be  closed  at  3  P.  M. 
January  3d,  1903,  and  remain  closed  until  10  A.  M.  January  26th,  1903. 

JAMES  B.  ALLEN, 

Secretary. 


This  notice  would  be  published  in  a  newspaper  issued  in 
the  county  where  such  election  is  to  be  held,  at  least  once  in 
each  week  for  two  successive  weeks  immediately  preceding 
the  election  announced. 

If  the  polls  are  to  remain  open  for  a  certain  specified 
time,  as  is  frequently  the  case,  the  hours  for  the  opening  and 
closing  should  be  given  in  the  published  notice. 

Directors'  Meetings. 

The  following  is  a  general  form  for  notifying  the  board 
of  directors  of  a  special  meeting: 

Form  89. — Notice.    Special  Meeting  of  Directors. 

NELSON    CARBIDE    COMPANY, 
173  Duane  St.,  New  York. 

MARCH  5th,  1903. 
Mr.  JAMES  B.  WILSON, 

178  West  End  Ave.,  City: 

DEAR  SIR — You  are  hereby  notified  that,  pursuant  to  call  of  the  President, 
a  special  meeting  of  the  Board  of  Directors  of  this  Company  will  be 
held  in  its  office  at  3  P.  M.,  on  the  loth  day  of  March,  1903,  for  the  pur- 
pose of  acting  upon  the  resignation  of  the  Treasurer  of  the  Company, 
Mr.  John  Wells,  for  the  election  of  his  successor,  and  for  the  transaction 


248  CORPORATE  MANAGEMENT. 

of  such  other  business  in  connection  therewith  as  may  be  necessary  or 
desirable. 

Respectfully, 

HENRY  BRANDRETH  CUMMINGS, 

Secretary. 


This  notice  would  be  sent  to  every  member  of  the  board. 
If  the  call  for  meeting  had  been  signed  by  two  or  more 
directors  instead  of  the  president,  the  general  form  of  the 
notice  would  be  the  same  except  that  the  statement  of  the 
authority  for  the  call  would  read  "  pursuant  to  call  signed 
by  two  directors  of  the  company." 

Form  90. — Notice.    Regular  Meeting  of  Directors. 

WILLIS    MACHINE    COMPANY, 
175   Broadway,   New   York. 

AUGUST  7,  1903. 
JOHN  M.  BARCLAY, 

183  Nassau  St.,  City: 

DEAR  SIR — You  are  hereby  notified  that  the  regular  monthly  meeting  of 
the  Board  of  Directors  of  the  Willis  Machine  Company  will  be  held  in 
the  Company's  office,  175  Broadway,  August  I2th,  1903,  at  10  A.  M. 

Respectfully, 

HENRY  M.  GALE, 

Secretary. 

This  notice  would  be  sent  to  every  member  of  the  board, 
according  to  the  by-law  requirements,  usually  from  five  to 
ten  days  prior  to  the  meeting.  The  time  and  place  must  be 
as  specified  in  the  by-laws.  Sometimes  the  by-laws  fail  to 
provide  for  any  notice  of  regular  meetings  of  directors,  it 
being  assumed  that  self-interest  will  cause  the  time  to  be 
remembered.  In  such  cases,  it  would  always  be  proper  for 
the  secretary  to  send  out  informal  notices  on  his  own  re- 
sponsibility. 


CHAPTER  XXXIV. 
MINUTES    OF    FIRST    MEETINGS. 


The  first  meetings  of  a  new  corporation  are  usually 
purely  formal.  The  organization  of  the  company  is  to  be 
perfected  and  certain  business  is  to  be  transacted  and  certain 
action  taken,  all  of  which  is  usually  well  understood  and 
agreed  upon  among  the  incorporators  in  advance.  To  such 
an  extent  is  this  true  that  the  minutes  of  the  first  meetings — 
both  of  stockholders  and  directors — are  usually  prepared 
before  the  time  of  meeting  by  the  attorneys  who  have  the 
incorporation  in  charge,  and  these  minutes  are  followed  to 
the  letter. 

At  the  first  meeting  of  stockholders,  which  precedes  the 
first  meeting  of  directors,  the  charter  is  to  be  received, 
by-laws  to  be  adopted,  directors  to  be  elected  (except  in 
New  York) ;  and,  if  any  particularly  important  business  is  to 
come  before  the  directors'  meeting,  the  stockholders  will 
pass  a  resolution  specially  authorizing  the  directors  to  act 
therein. 

At  the  first  meeting  of  directors,  which  usually  imme- 
diately follows  the  meeting  of  stockholders,  officers  are  to 
be  elected  and  installed,  all  the  various  opening  details  of  the 
business  are  to  be  provided  for,  and  any  other  matter  requir- 
ing immediate  attention  relating  to  the  company  and  its 
business  will  be  acted  upon. 

The  procedure  at  these  first  meetings  varies  somewhat 
according  to  the  requirements  of  the  state  in  which  the  com- 
pany is  incorporated.  Usually  the  first  meetings  of  stock- 
holders must  be  held  within  the  state  in  which  the  company 
is  incorporated,  though  this  is  not  true  of  some  few  states,  as 
West  Virginia  and  South  Dakota. 

249 


250  CORPORATE  MANAGEMENT. 

Where  all,  or  a  majority  of  the  incorporators  reside  out- 
side the  state  of  incorporation,  the  requirement  that  the  first 
meeting  of  stockholders  must  be  held  within  the  home  state 
is  complied  with  by  the  use  of  proxies.  Under  such  circum- 
stances the  entire  stockholding  interest  will  at  times  be 
represented  by  proxies  in  the  hands  of  the  company's 
attorney  or  agent,  who,  residing  within  the  state  of  incor- 
poration, or  journeying  there  for  the  purpose,  holds  the 
meeting,  transacts  all  needful  business,  prepares  the  proper 
minutes,  and  brings  them,  or  sends  them,  to  the  secretary 
of  the  company.  Such  meetings,  though  purely  formal  and 
frequently  conducted  by  parties  who  are  not  stockholders 
at  all,  but  merely  holders  of  proxies  from  stockholders,  are 
perfectly  legal.  Such  meetings  are,  of  course,  only  requisite 
in  the  case  of  "  non-resident  "  corporations  which  are  organ- 
ized in  one  state  to  secure  the  benefit  of  its  incorporation 
laws  while  the  incorporators  reside  in  other  states  and  the 
corporations  expect  to  do  business  elsewhere. 

It  should  be  noted  that  in  New  York  the  directors  for  the 
first  year  are  named  ir  and  appointed  by  the  charter,  and 
that  these  directors  have  power  to  adopt  by-laws,  subject  to 
any  subsequent  action  of  the  stockholders  and  to  do  all 
things  necessary  to  organize  the  company.  This  being  true, 
the  first  meeting  of  stockholders  in  New  York  State  is  not 
of  the  same  importance  as  elsewhere.  If,  however,  specially 
important  business  is  to  come  before  the  first  meeting  of 
directors,  such  as  the  issue  of  the  company's  entire  stock 
for  property,  a  preliminary  stockholders'  meeting  to  approve 
and  authorize  such  action  should  always  be  held. 

The  following  minutes  of  first  meeting  of  stockholders 
are  adapted  to  New  York.  With  the  addition  of  an  election 
for  directors,  they  would  be  suitable  for  most  of  the  other 
states.  In  a  few  states  special  statutory  requirements  must 
be  observed,  such  as  the  designation  of  state  office  and  resi- 
dent agent  in  New  Jersey  and  Delaware. 


MINUTES  OF  FIRST   MEETINGS.  251 

Form  91. — Minutes  of  First  Meeting  of  Stockholders. 

MINUTES  OF  FIRST  MEETING  OF  STOCKHOLDERS 

of  the 
MARSTON   MANUFACTURING   COMPANY. 


Held  June  10,  1903. 


Pursuant  to  written  call  and  waiver  of  notice,  the  first  meeting  of 
stockholders  of  the  Marston  Manufacturing  Company  was  held  in  the 
office  of  Morris  P.  Marston,  165  Grand  Avenue,  Brooklyn,  New  York, 
at  10  A.  M.,  on  the  loth  day  of  June,  1903,  with  all  the  stockholders 
present,  either  in  person  or  by  proxy. 

Mr.  Morris  P.  Marston  was  chosen  Chairman  and  called  the  meeting 
to  order.  Mr.  Henry  Cornell  was  appointed  Secretary  of  the  meeting. 

The  following  stockholders  were  present  in  person: 

SHARES 
NAME.  SUBSCRIBED. 

Morris  P.  Marston , 25 

Henry  Cornell   10 

The  following  stockholders  were  present  by  proxies  duly  presented 
and  filed  with  the  Secretary: 

SHARES 
NAME.  NAME  OF  PROXY.  SUBSCRIBED. 

John  Adams Willis  Ellis 10 

William  B.  Ames Harvey   Clinton 5 

The  Secretary  presented  the  call  and  waiver  of  notice  pursuant  to 
which  the  meeting  was  held,  duly  signed  by  all  the  incorporators  of  the 
Company.  Said  call  and  waiver  was  ordered  spread  upon  the  minutes 
and  is  as  follows: 

(Insert  here  Call  and  Waiver  of  Notice,  Form  75.) 

The  Chairman  then  presented  a  certified  copy  of  the  Certificate  of 
Incorporation  of  the  Company  and  stated  that  said  certificate  had  been 
filed  with  the  Secretary  of  State  and  recorded  by  him  on  the  5th  day  of 
June,  1903,  and  that  a  duplicate  copy  had  been  filed  for  record  with  the 
County  Clerk  on  the  7th  day  of  June,  1903. 

Upon  motion,  duly  made  and  carried,  said  Certificate  of  Incorpora- 
tion was  ordered  received,  the  Directors  named  therein  were  recognized 
as  the  Directors  of  the  Company,  and  the  Secretary  was  instructed  to 
spread  the  said  Certificate  in  full  upqn  the  first  pages  of  the  Book  of 
Minutes. 

The  Chairman  also  presented  a  form  of  by-laws,  prepared  by  John  B. 
Graham,  Esq.,  Counsel  for  the  Company,  which  was  read,  article  by 
article,  and,  as  a  whole,  unanimously  adopted  as  the  by-laws  of  the 
Company,  and  ordered  entered  in  the  Minute  Book  immediately  succeed- 
ing the  Certificate  of  Incorporation. 

The  Secretary  then  presented  a  written  proposal  from  Mr.  Wilson  _M. 
Adair,  of  192  Clinton  Avenue,  Brooklyn,  offering  to  transfer  and  assign 
to  the  Company  certain  property,  as  set  forth  in  said  proposal,  in 


252  CORPORATE  MANAGEMENT. 

exchange  for  the  entire  capital  stock  of  the  Company,  to  be  issued  to 
his  order,  full-paid  and  non-assessable.  (See  Form  do.) 

After  due  consideration,  said  proposal  was  ordered  received  and  the 
following  resolution  in  regard  thereto  was  moved,  seconded  and  passed 
by  unanimous  vote: 

Whereas,  A  proposition  has  been  received  from  Mr.  Wilson  M.  Adair, 
offering  to  sell,  assign  and  convey  to  this  Company  the  property  at 
Greenpoint,  Long  Island,  known  as  the  Adair  Manufacturing  Plant,  all 
as  set  forth  in  said  proposition,  in  exchange  for  the  entire  capital  stock 
of  the  Company,  to  be  issued  full-paid  and  non-assessable  to  the  order 
of  the  said  Wilson  M.  Adair;  and 

Whereas,  It  appears  to  the  stockholders  of  this  Company  that  the 
said  property  is  desirable  for  the  purposes  of  the  Company,  and  is  rea- 
sonably worth  the  purchase  price  thereof; 

Now,  Therefore,  Be  It  Resolved,  That  the  said  proposition  for  the 
exchange  of  said  property  for  the  entire  capital  stock  of  this  Company, 
as  set  forth  in  said  proposition,  be  and  hereby  is  approved,  and  the 
Board  of  Directors  of  this  Company  are  hereby  authorized,  empowered 
and  instructed  to  accept  the  said  proposition,  and  to  cause  the  entire 
capital  stock  of  the  Company  to  be  issued  for  the  said  property,  in 
accordance  with  its  terms. 

There  being  no  further  business  before  the  meeting,  it  was  adjourned. 

HENRY  CORNELL, 

Secretary 
MORRIS  P.  MARSTON, 

Chairman. 


Mr.  Adair's  proposition  might  have  been  entered  in  full 
in  the  minutes  of  this  first  meeting  of  stockholders,  and,  if  so, 
would  have  appeared  just  after  the  paragraph  descriptive  of 
the  proposition  and  its  presentation  by  the  secretary.  It 
would  be  prefaced  by  the  following  statement : 

"  Said  proposition  was   ordered  received  and   spread   upon   th« 
minutes  and  is  as  follows:"    (See  Form  60  for  proposition.) 

Inasmuch,  however,  as  the  proposition  should  properly 
appear  in  the  minutes  of  the  directors'  meeting  where  it  is 
formally  acted  upon,  it  is  better  omitted  from  the  stock- 
holders' minutes  and  should  not  be  included  unless  there  is 
some  special  reason  for  its  appearance. 

In  any  other  state  than  New  York,  an  election  of 
directors  would  be  an  important  feature  of  the  minutes  of  the 
first  stockholders'  meeting.  This  election  would  be  held 
immediately  after  the  adoption  of  the  by-laws  and  a  usual 
form  of  entry  would  be  as  follows : 


MINUTES  OF  FIRST  MEETINGS.  368 

Form  92. — Entry  in  Minutes  for  Election  of  Directors. 


The  President  then  announced  as  next  in  order-  the  election  of  a 
Board  of  five  Directors,  to  serve  until  the  next  Annual  Meeting  of 
Stockholders,  and  until  the  election  and  acceptance  of  their  duly  quali- 
fied successors.  Messrs.  John  Hildebrand  and  William  S.  Sanderson 
were  appointed  tellers  to  conduct  the  election,  which  was  by  ballot,  and 
which  resulted  in  the  election  of  the  following  gentlemen  as  Directors  by 
the  unanimous  vote  of  all  present: 

Henry  V.  Ives,  Wilson  H.  Dermott, 

James  H.  Thompson,  Servitt  T.  Heldrick, 

Masterson  B.  Branch. 


This  entry  would  be  quite  sufficient  for  the  election  of 
directors  at  a  first  meeting  when,  as  is  generally  the  case, 
the  matter  has  been  practically  settled  in  advance  and  there 
is  no  conflict.  Should  there,  however,  be  any  contest,  the 
entry  should  be  made  more  in  detail  as  follows : 

Form  93. — Entry  in  Minutes  for  Election  of  Directors.  Formal. 


The  President  then  announced  as  the  next  order  of  business  the  elec- 
tion of  a  Board  of  Five  Directors  to  serve  until  the  Annual  Meeting 
of  Stockholders  or  until  the  election  and  acceptance  of  their  duly  quali- 
fied successors.  The  following  names  were  duly  placed  in  nomination: 
Henry  V.  Ives,  Wilson  H.  Dermott,  James  H.  Thompson,  Servitt  T. 
Heldrick,  Masterson  B.  Branch,  Warren  N.  Greene,  Willis  M.  Thorne. 
The  President  appointed  Messrs.  John  Hildebrand  and  William  S. 
Sanderson  as  inspectors  to  conduct  the  election.  Ballots  were  then 
prepared,  and,  after  collecting  and  counting  the  same,  the  inspectors 
announced  the  following  results: 

Henry  V.    Ives 10  votes. 

Wilson  H.  Dermott 10 

James  H.  Thompson 10 

Servitt  T.  Heldrick 6 

Masterson  B.   Branch 6 

Warren  N.   Greene ' 4 

Willis  M.  Thorne 4 

The  President  thereupon  declared  Messrs  Ives,  Dermott.  Thompson, 
Heldrick  and  Branch  the  duly  elected  Directors  of  the  Company. 


In  New  York  (after  the  first  election)  and  in  New  Jersey, 
inspectors  of  election  are  usually  appointed  by  the  president 
or  elected  by  the  stockholders,  as  may  be  provided  by  the 


254  CORPORATE  MANAGEMENT. 

by-laws.  (See  §  54.)  These  inspectors  are  sworn  to  the 
proper  discharge  of  their  duties  and  are  placed  in  entire 
charge  of  the  election.  At  its  conclusion  they  announce  the 
result  and  sign  and  make  affidavit  to  a  formal  statement 
thereof.  (See  Forms  67  to  70.) 

Form  94. — Minutes  of  First  Meeting  of  Directors. 

MINUTES  OF  THE  FIRST  MEETING  OF  DIRECTORS 

of  the 
MARSTON    MANUFACTURING    COMPANY. 


Held  June  10,  1903. 


Pursuant  to  written  call  and  waiver  of  notice,  the  Board  of  Directors 
of  the  Marston  Manufacturing  Company  held  its  first  meeting  in  the 
office  of  Morris  P.  Marston,  165  Grand  avenue,  Brooklyn,  at  n  A.  M.,  on 
the  loth  day  of  June,  1903. 

Mr.  Morris  R  Marston  was  chosen  as  temporary  Chairman  and  Mr. 
Henry  Cornell  was  appointed  temporary  Secretary  of  the  meeting. 
All  the  members  of  the  Board  were  present  as  follows: 
Morris  P.  Marston, 
Henry  Cornell, 
John  Adams. 

On  request  of  the  Chairman  the  Secretary  presented  the  Call  and 
Waiver  of  Notice,  pursuant  to  which  the  meeting  was  held,  duly  signed 
by  all  the  members  of  the  Board.  It  was  ordered  spread  upon  the 
minutes  and  is  as  follows: 

(Insert  here  Call  and  Waiver  of  Notice,  Form  76.) 
The  Chairman  then    appointed    Messrs.    Henry    Cornell    and    John 
Adams,  tellers  to  conduct  the  election   for  officers  of  the   Company,  the 
officers  so  elected  to  serve  for  the  remainder  of  the  corporate  year  and 
until  the  election  of  their  successors. 

The  votes  of  those  present  were  then  duly  cast  by  ballot,  resulting  in 
the  election  by  unanimous  vote  of  the  following  officers: 

President Morris  P.  Marston. 

Vice-President .' John  Adams. 

Secretary  and  Treasurer Henry    Cornell. 

The  permanent  officers  of  the  Company  thereupon  took  charge  of  the 
meeting. 

The  Secretary  presented  a  form  of  stock  certificate  for  approval, 
which  was  by  motion  adopted  as  the  form  for  the  stock  certificates  of 
the  Company  as  prepared  by  its  Directors,  and  the  Secretary  was 
instructed  to  spread  the  said  form  upon  the  pages  of  the  Minute  Book 
immediately  following  the  record  of  the  meeting  then  in  progress. 

The  President  then  presented  a  written  proposal  from  Mr.  Wilson  M. 
Adair,  of  Brooklyn,  offering  to  assign  to  the  Company,  in  exchange  for 


MINUTES  OF  FIRST  MEETINGS.  255 

its  entire  Capital  Stock,  certain  specified  property.  The  said  proposal 
was  ordered  spread  in  full  upon  the  minutes  and  is  as  follows: 

(Insert  here  Proposal  to  Exchange  Property  for  Stock,  Form  60.) 

The  President  also  presented  a  resolution  of  the  stockholders, 
approving  the  said  proposal  and  authorizing  and  instructing  the  Directors 
to  accept  the  same  and  to  take  such  action  in  regard  thereto  as  might 
be  necessary  to  make  such  acceptance  fully  effective. 

The  following  resolution  was  thereupon  moved,  seconded  and  unani- 
mously adopted: 

Whereas,  The  property  offered  in  exchange  for  the  Capital  Stock  of 
this  Company  by  Mr.  Wilson  M.  Adair  in  his  proposition  to  the  Com- 
pany is  adjudged  by  this  Board  to  be  of  the  reasonable  value  of  Fifty 
Thousand  Dollars  ($50,000),  and  to  be  necessary  for  the  use  and  lawful 
purposes  of  this  Company; 

Resolved,  That  the  said  property  be  and  hereby  is,  in  accordance  with 
the  authorization  and  instructions  of  the  stockholders  of  this  Company, 
accepted  in  full  payment  for  the  said  Capital  Stock  of  the  Company,  in 
accordance  with  the  terms  of  said  proposition;  and  the  proper  officers  of 
this  Company  are  hereby  authorized  and  directed  to  receive  the  duly 
executed  transfers  and  assignments  of  the  property  specified  in  said 
proposition  and  to  issue  in  exchange  therefor  the  entire  stock  of  the 
Company,  full-paid  and  non-assessable,  to  such  person  or  persons  as 
may  be  designated  by  the  written  orders  of  the  aforementioned  Wilson 
M.  Adair,  except  as  to  the  shares  subscribed  for  by  the  incorporators, 
which  shall  be  issued  to  them  or  their  order. 

Upon  motion  duly  made,  seconded  and  passed,  the  following  resolu- 
tion was  adopted: 

Resolved,  That  the  Treasurer  be  and  hereby  is  authorized  and 
instructed  to  open  an  account  for  the  Company  with  the  Seaboard 
National  Bank  of  New  York  City,  and  to  deposit  therein  all  funds  of  the 
Company  coming  into  his  custody;  such  account  to  be  in  the  name  of  the 
Company  and  funds  deposited  therein  to  be  withdrawn  only  by  check, 
signed  by  the  Treasurer  and  countersigned  by  the  President. 

The  following  motions  were  then  made,  seconded  and  duly  passed  by 
the  unanimous  vote  of  all  present: 

Moved,  That  the  President  be  hereby  authorized  to  lease  for  the  use 
of  the  Company  such  suitable  office  or  offices  in  this  City  as  may  be 
necessary  for  the  proper  transaction  of  the  Company's  business,  such 
lease  to  be  for  one  year,  with  privilege  of  renewal,  at  an  annual  rental 
not  exceeding  $900,  and  the  office  so  secured  to  be  the  principal  office  of 
the  Company  within  the  State  of  New  York. 

Moved,  That  the  Secretary  be  hereby  instructed  to  procure  a  book  of 
stock  certificates  in  proper  form,  and  a  corporate  seal,  as  provided  for  in 
the  by-laws  of  this  Company;  also  all  such  record,  stock  and  transfer 
books,  and  books  of  account  and  stationery  and  office  supplies,  as  may 
be  necessary  for  the  proper  operation  and  record  of  the  Company's  busi- 
ness and  transactions. 

Moved,  That  the  Secretary  be  instructed  to  prepare  or  have  prepared, 
in  due  and  proper  form,  a  certificate  of  the  payment  of  one-half  the 
capital  stock  of  the  Company,  and,  after  the  due  execution  and  verifica- 
tion thereof,  to  file  said  certificate  as  required  by  law,  and  to  spread  a 
copy  thereof  upon  the  pages  of  the  minute  book  following  the  record  of 
the  present  proceedings. 

Moved,  That  the  Treasurer  be  hereby  authorized  and  instructed  to 
pay  from  the  Company  funds  the  expenses  properly  incurred  in  the 
incorporation  of  the  Company  or  in  connection  therewith. 

Moved,  That  Messrs.  James  H.  Melton  and  Henry  R.  Flower  be 
hereby  appointed  inspectors  of  election  to  serve  at  the  first  annual  elec- 


256  CORPORATE  MANAGEMENT. 

tion  of  Directors  of  the  Company,  and  at  any  elections  of  directors  by 
the  stockholders  previous  thereto. 

There  being  no   further  business   for  consideration  the   meeting   was 
adjourned. 

HENRY  CORNELL, 

Secretary. 
MORRIS  P.  MARSTON, 

President. 


Following  the  preceding  minutes  on  the  pages  of  the  min- 
ute book  would  appear  the  form  of  stock  certificate  adopted 
at  the  meeting;  also  copy  of  the  certificate  of  payment  of 
one-half  the  capital  stock  of  the  company.  The  call  and 
waiver  of  notice  might  also  have  been  ordered  spread  upon 
the  minute  book  following  the  record  of  the  proceedings. 
The  proposal  for  exchange  of  property  for  the  stock  of  the 
company  might  be  entered  in  the  same  way  after  the  record 
of  the  proceedings,  but  is  used  so  directly  as  a  basis  for  the 
subsequent  proceedings  that  it  is  better  incorporated  in  the 
minutes  as  shown. 

If  bond  is  required  of  the  treasurer,  and  the  by-laws  do 
not  specify  the  amount,  sureties  and  other  details,  action 
thereon  should  be  taken  at  this  first  meeting  and  would 
appear  just  after  the  record  of  the  election  of  officers  as 
follows : 

"  By  motion,  duly  seconded  and  passed,  the  amount  of  the  Treas- 
urer's bond  was  fixed  at  $1,000,  such  bond  to  be  in  form  and  with 
sureties  approved  by  the  Board. 

The  Treasurer-elect  then  presented  a  bond  for  said  amount  signed 
by  himself  as  principal  and  by  James  F.  Melton  and  John  W.  Hart- 
leigh  as  sureties.  The  form  of  the  instrument  and  the  sureties 
thereon  meeting  with  the  approval  of  the  Board,  the  bond  as  pre- 
sented was  formally  accepted  and  placed  in  custody  of  the  President" 


CHAPTER   XXXV. 
MINUTES   OF   SPECIAL   MEETINGS. 


The  following  minutes  of  special  meeting  of  stockholders 
are  written  on  the  supposition  that  the  meeting  is 'held  in 
pursuance  of  the  call  of  the  president  (See  Form  80)  fol- 
lowed by  notice  duly  sent  out  by  the  secretary  in  accordance 
with  its  instructions  (See  Form  85) ;  also  that  the  by-laws 
provide  that  the  regular  officers  of  the  company  shall  take 
charge  of  stockholders'  meetings. 

Form  95. — Minutes  of  Special  Meeting  of  Stockholders.    To 
Sell  Property. 

MINUTES  OF  SPECIAL  MEETING  OF  STOCKHOLDERS 

of  the 
CARONDELET    SILK    COMPANY. 


Held  August  20,   1903. 


Pursuant  to  formal  Call  and  Notice,  the  stockholders  of  the  Caronde- 
let  Silk  Company,  assembled  in  special  meeting  in  the  office  of  the  Com- 
pany, 145  Main  Street,  Paterson,  N.  J.,  at  10  A.  M.,  on  the  20th  day  of 
August,  1903. 

The  meeting  was  called  to  order  by  President  Gowey,  Secretary  Hark- 
ness  officiating  as  recording  officer. 

The   entire   capital   stock  of  the   Company  was  represented   at   the 
meeting  either  in  the  person  of  the  owner  or  by  proxy. 

The  stock  represented  in  the  person  of  the  owners  was  as  follows: 

Samuel  T.  Adams 100  shares. 

Willis  S.  Baker 150 

Henry    Buchanan 100 

John  F.  Gowey 500 

John  T.  Harkness 100 

James  P.   Harmon 200 

William  Perkins   IOO 

Sargent  P.  Wylie 150 

17  257 


258  CORPORATE  MANAGEMENT. 

The  following  stockholders  owning  the  number  of  shares  of  stock  set 
opposite  their  respective  names  were  represented  by  proxies  duly  pre- 
sented and  filed  with  the  Secretary,  all  said  proxies  being  made  out  in 
the  name  of  John  T.  Harkness: 

John  F.  Aldrich 250  shares. 

John  B.  Goodell 150 

Weldon  P.  Hunt 200 

On  request  of  the  President,  the  Secretary  presented  the  Call  and 
Notice  pursuant  to  which  the  meeting  was  held.  These  were  ordered 
entered  upon  the  minutes  of  the  meeting  and  are  as  follows: 

(Call,  Form  80.)     (Notice,  Form  85.) 

President  Gowey  then  briefly  stated  the  purpose  of  the  meeting  to  be 
the  consideration  of  a  proposition  for  the  purchase  of  the  entire  property 
of  the  Company,  including  patents,  machinery,  realty,  stock  on  hand, 
book  accounts,  orders  and  all  other  assets  of  the  Company,  save  cash 
in  bank,  and  bills  and  accounts  receivable.  That  said  proposition  was 
received  from  the  Cumberford  Silk  Manufacturing  Co.  of  Paterson,  the 
object  of  the  purchase  being  the  consolidation  of  the  Cumberford  and 
Carondelet  businesses  under  one  management.  That,  if  the  proposition 
were  accepted,  the  Cumberford  people  would  organize  a  Company  with  a 
capitalization  of  $750,000  to  take  over  and  operate  the  two  properties, 
the  price  offered  for  the  Carondelet  property  being  $150,000  in  cash  and 
$150,000  in  stock  of  the  new  Company. 

In  conclusion  the  President  advised  strongly  the  acceptance  of  the 
proposition,  stating  that  on  account  of  floods  and  strikes,  from  both  of 
which  the  Company  had  suffered,  the  Carondelet  Company  would  be 
unable  to  pay  the  accustomed  dividend  for  1903;  that  the  future  outlook 
was  very  uncertain,  and  that  the  prospects  of  a  strong  Company,  such 
as  the  Cumberford  people  proposed  to  organize,  were  far  better  in  every 
way  than  could  possibly  be  the  case  with  a  smaller  company;  and  that, 
for  the  reasons  stated,  as  well  as  for  others  that  could  not  be  gone  into 
at  that  time,  he  considered  the  acceptance  of  the  proposition  advisable 
and  to  the  interests  of  the  stockholders. 

An  extended  discussion  of  the  matter  followed  the  President's  state- 
ment, the  opinion  being  expressed  by  several  stockholders  that  the  pro- 
posed consolidation  was  illegal,  and  numerous  questions  being  asked 
President  Gowey  as  to  the  financial  features  and  other  details  involved 
in  the  proposition  submitted. 

Finally  Mr.  Buchanan  moved  that  the  meeting  be  adjourned  until 
10  A.  M.  of  the  following  day,  in  order  to  give  the  stockholders  time  to 
look  into  the  matter  and  confer  among  themselves.  The  motion  was 
duly  seconded  and  passed,  and  the  President  thereupon  declared  the 
meeting  adjourned  in  accordance  with  said  motion. 

JOHN  T.  HARKNESS, 

Secretary. 
JOHN  F.  GOWEY, 

President. 


MINUTES    OF  SPECIAL  MEETINGS.  259 

Form  96. — Minutes  of  Adjourned  Meeting  of  Stockholders. 
To  Sell  Property. 


MINUTES  OF  ADJOURNED  MEETING  OF  STOCKHOLDERS 

of  the 
CARONDELET    SILK    COMPANY. 


Held  August  21,   1903. 


Pursuant  to  adjournment,  the  special  meeting  of  the  stockholders  of  the 
Carondelet  Silk  Company  reassembled  in  the  office  of  the  Company  at 
10  A.  M.  on  the  2ist  day  of  August,  1903. 

The  meeting  was  called  to  order  by  President  Gowey,  with  Secretary 
Harkness  officiating  as  recording  officer. 

The  stockholders  of  the  Company  were  all  present  in  person  save  Messrs. 
John  F.  Aldrich,  John  B.  Goodell  and  Weldon  P.  Hunt,  who  were  repre- 
sented by  proxies  in  the  hands  of  Secretary  Harkness. 

The  minutes  of  the  special  meeting  of  stockholders  held  on  the  preceding 
day,  and  from  which  the  present  meeting  was  adjourned,  were  read  for  the 
information  of  those,  present. 

After  the  reading  of  the  minutes,  Mr.  Buchanan  offered  the  following 
resolution : 

Whereas,  A  certain  proposition  has  been  made  by  the  Cumberford  Silk 
Manufacturing  Company  of  Paterson  for  the  purchase  of  the  entire  property 
of  this  Company,  save  cash  in  bank,  and  bills  and  accounts  receivable,  the 
consideration  offered  being  $150,000  in  cash  and  $150.000  face  value  of  stock 
in  a  certain  new  corporation  to  be  formed  for  the  pury  jse  of  taking  over  the 
business  and  properties  of  the  two  Companies;  and 

Whereas,  The  stockholders  of  this  Company  are  favorably  impressed 
with  said  proposition,  but  believe  that  a  full  legal  investigation  of  the  whole 
matter  should  be  made  before  proceeding  further; 

Now  Therefore  Be  It  Resolved,  That  the  stockholders  of  this  Company 
hereby  instruct  and  authorize  the  Directors  of  the  Company  to  employ  such 
competent  legal  assistance  as  may  be  necessary  to  investigate  and  report 
upon  said  proposition  in  all  its  phases,  and,  if  such  investigation  shall  show 
that  there  are  no  legal  objections  to  the  contemplated  sale,  to  accept  the 
said  proposition  and  to  do  all  things  necessary  to  carry  such  acceptance  into 
effect. 

The  resolution  as  read  was  seconded  by  Mr.  Adams,  and  after  a  short 
discussion,  was  carried  by  the  unanimous  vote  of  all  present. 

There  being  no  further  business  before  the  meeting,  the  President 
declared  it  adjourned  sine  die. 

JOHN  T.  HARKNESS, 

JOHN  F.  GOWEY,  Secretary. 

President. 


No  notice  of  an  adjourned  meeting  is  required  unless 
specially  ordered.  If,  however,  the  adjournment  is  for  a  num- 


260  CORPORATE  MANAGEMENT. 

her  of  days  or  until  a  date  somewhat  removed,  it  would  be 
entirely  proper  and  advisable  for  the  secretary  to  send  out  a 
notice  of  such  adjourned  meeting  a  few  days  before  its 
assembling. 

Special  Meetings  of  Directors. 

Special  meetings  of  the  board  of  directors  of  a  company 
may  be  assembled  by  call  and  waiver  (Form  78)  or  by  call 
(Form  84),  the  call  being  followed  by  the  secretary's  notice 
of  such  meeting.  Also  by  consent  of  all  the  directors  a 
special  meeting  of  the  board  may  be  held  at  any  time  and 
place  and  without  notice.  This  last  method  is  a  variation  of 
the  call  and  waiver  and  a  meeting  held  in  this  way  is  called 
a  "  Consent  Meeting,"  because  the  consent  of  all  the  mem- 
bers is  requisite.  (See  Form  79.) 

The  following  minutes  are  written  on  the  assumption  that 
the  meeting  was  assembled  by  call  and  waiver.  (Form  78.) 

Form  97. — Minutes  of  Directors'  Special  Meeting. 

MINUTES  OF  SPECIAL  MEETING  OF  DIRECTORS 

of  the 
NELSON  CARBIDE  COMPANY. 


Held  March  10,  1903. 


The  Board  of  Directors  assembled,  pursuant  to  Call  and  Waiver  of 
Notice,  in  special  meeting  in  the  office  of  the  Company,  No.  173  Duane  St., 
New  York  City,  at  3  p.  M.  March  10,  1903. 

The  meeting  was  called  to  order  by  President  Atterbury,  with  Henry 
Brandeth  Cummings  acting  as  Secretary. 

All  the  members  of  the  Board  were  present  and  participated  in  the 
meeting. 

The  Secretary  presented  the  Call  and  Waiver,  duly  signed  by  all  the 
members  of  the  Board,  pursuant  to  which  the  meeting  was  held.  There 
being  no  objection  thereto,  the  President  ordered  that  the  Call  and  Waiver 
be  spread  upon  the  minutes. 

(Form  78.) 

The  President  then  stated  that  Mr.  John  Wells,  Treasurer  of  the  Com- 
pany for  nearly  four  years  past,  had  somewhat  unexpectedly  determined  to 


MINUTES  OF  SPECIAL  MEETINGS.  261 

leave  the  city,  and  as  this  absence  would  be  permanent,  had  handed  in  his 
resignation. 

Upon  request  of  the  President  the  Secretary  read  Mr.  Wells'  resignation, 
which  is  as  follows  : 

(Form  52.) 

On  motion  of  Mr.  Wilson,  seconded  by  Mr.  Williams  and  carried  by 
unanimous  vote  of  the  Board,  Mr.  Wells'  resignation  as  Treasurer  was 
accepted  and  the  thanks  of  the  Board  were  tendered  him  for  the  faithful  and 
efficient  manner  in  which  he  had  discharged  the  duties  of  his  office. 

After  an  informal  discussion,  Mr.  Byrnes  nominated  Mr.  Henry  Bruce, 
Assistant  Treasurer  of  the  Company,  for  the  position  of  Treasurer.  The 
nomination  was  seconded  by  Mr.  Williams,  and  there  being  no  other  nomi- 
nations for  the  office,  Mr.  Bruce  was,  by  unanimous  vote  of  the  Board, 
elected  Treasurer. 

On  motion  duly  seconded  and  passed,  Messrs.  Atterbury  and  Bruce  were 
authorized  to  make  such  audit  of  the  former  Treasurer's  accounts  as  seemed 
to  them  expedient,  and  to  receive  and  receipt  for  the  moneys  and  property 
turned  over  to  his  successor. 

There  being  no  further  business  before  the  meeting,  it  was,  upon  motion, 
adjourned  sine  die. 

HENRY  BRANDETH  CUMMINGS, 

HENRY  ATTERBURY,  Secretary. 

President. 


CHAPTER   XXXVI. 
MINUTES   OF   REGULAR   MEETINGS. 

Form  98. — Annual  Meeting  of  Stockholders. 

MINUTES  OF  ANNUAL  MEETING 

of  the 
TERRE  BONNE  CEMENT  COMPANY. 


Held  January  24,  1903. 


The  stockholders  of  the  Terre  Bonne  Cement  Company  met  in  annual 
meeting  in  the  office  of  the  Company  at  10  A.  M.,  January  24,  19x33. 

The  meeting  was  called  to  order  by  President  Rossmore,  who  presided. 
Secretary  Allen  acted  as  Secretary  of  the  meeting. 

The  call  of  roll  showed  that  out  of  a  total  of  2,500  shares  of  stock  out- 
standing, 2,400  were  present  or  represented  by  proxies,  the  same  consti- 
tuting a  legal  quorum.  (See  Secretary's  List,  Form  65.) 

The  Secretary  submitted  a  copy  of  the  notice  of  meeting  with  his  certifi- 
cate attached  showing  that  copies  thereof  had  been  mailed  to  each  stock- 
holder of  record  on  or  before  the  I4th  day  of  January,  1903;  also  copies 
of  the  Albany  Argus,  dated,  respectively,  January  nth  and  January  i8th, 
I903.  containing  due  advertisement  of  the  meeting.  (See  Form  88.) 

No  objection  being  offered  thereto,  the  proof  of  notice  as  presented  was 
ordered  received  and  filed.  (For  Notice,  see  Form  87.  For  Certifications, 
see  Forms  125-127.) 

The  minutes  of  the  preceding  annual  meeting  were  then  read  and 
approved.  The  minutes  of  the  special  meeting  of  stockholders  held  Sep- 
tember 24th,  1902,  were  also  read  and  approved. 

The  annual  report  of  President  Rossmore  was  then  presented,  and,  upon 
request,  was  read  by  him.  The  report  was,  on  motion,  ordered  received  and 
filed.  (See  Form  71.) 

The  Treasurer's  annual  report  was  submitted  and  read,  and  no  objection 
being  offered,  was  ordered  received  and  filed.  (See  Form  72.) 

The  report  of  the  Committee  on  By-laws  followed,  which  was  also  read 
and,  on  motion,  was  ordered  received  and  filed.  (See  Form  73.) 

The  election  of  directors  for  the  ensuing  year  being  next  in  order,  the 
President  appointed  Henry  M.  Ames  and  Morris  Pearry,  Inspectors  of 
Election. 

Nominations  being  then  called  for,  the  following  gentlemen  were  placed 
in  nomination : 

262 


MINUTES  .OF  REGULAR  MEETINGS.  263 

Ellis  T.  Percival,  Albert  M.  Rossmore,  Alfred  N.  Erricson,  James  F. 
Gough,  Oliver  N.  Simpson,  E.  Francis  Henderson  and  Harkness  B.  Lewis. 
The  Inspectors  of  Election  were  then  duly  sworn  (see  Form  67)  and 
took  charge  of  and  conducted  the  election.  The  election  was  by  ballot, 
and  at  its  conclusion  the  Inspectors  made  their  formal  report,  announcing 
and  certifying  to  the  election  of  the  following  gentlemen  as  Directors  of  the 
Company  for  the  ensuing  year: 

Ellis  T.  Percival, 

Albert  M.  Rossmore, 

Alfred  N.  Erricson, 

James  F.  Gough, 

Oliver  N.  Simpson. 

The  President  instructed  the  Secretary  to  preserve  a  copy  of  the  Inspect- 
ors' Report  among  the  records  of  the  Company.  (See  Form  68.) 

The  recommendations  contained  in  the  report  of  the  Committee,  on 
By-laws  were  then  taken  up  and  discussed  at  considerable  length.  A  number 
of  motions  were  made  in  reference  thereto,  but  were  uniformly  lost,  until 
it  became  apparent  that  agreement  on  the  matter  was  impossible,  when, 
on  motion  of  Mr.  Pearry,  duly  seconded  and  carried,  the  meeting  was 
adjourned. 

JAMES  B.  ALLEN, 

ALBERT  M.  ROSSMORE,  Secretary. 

President. 


Form  99. — Regular  Meeting  of  Directors. 

MINUTES  OF  REGULAR  MEETING  OF  DIRECTORS 

of  the 
WILLIS   MACHINE   COMPANY. 


Held  August  12,  1903. 


The  Board  of  Directors  of  the  Willis  Machine  Company  met  in  regular 
meeting  in  the  office  of  the  Company,  No.  175  Broadway,  New  York  City, 
August  I2th,  1903,  at  10  A.  M. 

President  Johnson  presided  over  the  meeting  and  Secretary  Gale  acted 
as  recording  officer. 

Present,  Messrs.  Johnson,  Gates,  Hamilton,  Nevins  and  Herrick;  absent, 
Messrs.  Germaine  and  Gray. 

The  minutes  of  the  previous  meeting  were  read,  and,  after  correction 
by  the  insertion  of  Mr.  Nevins'  name  among  those  present  at  that  meeting, 
were  ordered  approved. 

The  Treasurer  then  reported  that  the  Company's  sight  draft  on  the 
Wells-Gibson  Manufacturing  Company  for  $850,  amount  due  on  boiler 
and  engine  furnished,  had  been  returned  unpaid  without  explanation,  the 
draft  being  merely  endorsed  "  Payment  Refused."  That  he  had  written 
the  Wells-Gibson  Manufacturing  Company  several  times  without  response, 
and  from  outside  information  he  understood  that  they  were  financially 
embarrassed. 


264  CORPORATE  MANAGEMENT. 

After  some  discussion,  the  matter  was,  by  motion,  referred  to  the 
Company's  attorney  to  bring  suit  or  take  such  action  as  might  be  neces- 
sary. 

The  President  made  a  short  verbal  report  on  the  condition  of  the 
business,  recommending  the  establishment  of  an  agency  in  Chicago  for 
the  sale  of  its  products. 

After  discussion,  the  President  was,  by  motion  duly  made  and  carried, 
directed  to  investigate  the  matter  further  and  to  report  at  the  next  regular 
meeting  of  the  Board  as  to  the  cost  of  establishing  such  agency  and  the 
possibility  of  securing  a  suitable  representative  to  take  charge  thereof. 

There  being  no  further  business  the  meeting  was  adjourned. 

HENRY  M.  GALE, 

WALLACE  B.  JOHNSON,.  Secretary. 

President. 


CHAPTER   XXXVII. 
CORPORATE  AND  OFFICIAL  SIGNATURES. 


The  signature  of  a  corporation  official  followed  by  the 
name  of  his  office,  is  usually  referred  to  as  an  official 
signature. 

The  name  of  a  corporation  duly  affixed  and  evidenced  by 
the  signature  of  the  affixing  officer  is  known  as  a  corporate 
signature. 

The  president  and  treasurer,  or  secretary,  are  frequently 
called  upon  to  join  in  the  corporate  signature.  Their  official 
signatures  are  in  constant  use  in  the  ordinary  course  of  cor- 
porate business. 

Speaking  generally,  the  corporate  signature  is  affixed  to 
all  important  instruments  where,  by  authority  of  the  board  of 
directors,  the  corporation  itself  is  to  be  directly  and  legally 
obligated,  while  the  official  signatures  of  the  officers  are 
employed  by  them  in  matters  pertaining  particularly  to  their 
respective  departments,  in  which  the  binding  of  the  corpora- 
tion does  not  enter  in,  or  where,  if  the  corporation  is  to  be 
bound,  the  authority  of  the  officer  signing  is  sufficient  to 
sustain  his  action. 

For  example,  the  president  will  sign  reports,  certain 
letters,  instructions,  etc.,  with  his  official  signature.  The 
treasurer  will  sign  notices  of  dividends  or  assessments, 
financial  statements,  and  even  checks  and  receipts  in  the 
same  manner,  while  the  secretary  affixes  his  official  signature 
to  the  minutes  of  meetings,  to  reports,  notices  and  to  many 
letters. 

In  regard  to  letter  signatures  it  should  be  noted  that 
practice  varies  widely.  In  perhaps  the  majority  of  corpora- 
tions the  corporate  signature  is  attached  to  every  letter  per- 

265 


266  CORPORATE  MANAGEMENT. 

taining  to  the  business  of  the  company,  unless  there  is  some 
special  reason  for  a  different  signature.  In  many  corpora- 
tions, however,  this  practice  is  exactly  reversed,  the  official 
signature  of  the  writer  being  always  employed  unless  there 
is  some  special  reason  for  the  corporate  signature.  The 
former  is  the  preferable  plan. 

Form  100. — Official  Signature. 

HENRY  M.  STANTON, 

President. 

This  is  the  simplest  form  of  official  signature.  It  is  suf- 
ficient if  the  letter,  notice,  report  or  other  document  to  which 
it  is  appended,  shows  plainly  and  unmistakably,  by  its  head- 
ing or  subject  matter,  of  what  company  the  person  signing 
is  an  official.  If  this  is  not  the  case  the  official  title  following 
the  name  must  be  written  out  in  full  as  in  the  following  form : 

Form  1 01. — Official  Signature.    Complete. 

HENRY  M.  STANTON, 

President  American  Machine  Works. 

Where  the  corporation  is  to  be  bound,  official  signatures 
should  not  be  used,  as  unexpected  complications  and  liabili- 
ties may  result.  For  instance,  should  the  president  of  a  com- 
pany sign  a  note  with  his  official  signature,  instead  of  with 
the  corporate  signature,  he  might  become  involved  thereby 
in  a  personal  liability  as  the  maker  or  endorser  of  the  note. 
(See  Chapter  XXXVIII.) 

To  facilitate  the  use  of  the  corporate  signature,  and  as  a 
matter  of  convenience,  every  officer  of  a  corporation  should 
be  provided  with  a. suitable  rubber  stamp  bearing  the  cor- 
porate name  and  so  arranged  that  the  insertion  of  the 
official's  name  will  give  the  corporate  signature  in  full.  The 
form  of  such  stamp  would  be  as  follows : 


CORPORATE  AND  OFFICIAL  SIGNATURES  267 

Form  102. — Stamp  for  Corporate  Signature. 

THE  RANSOME  WHEEL  COMPANY. 

By 

President 

The  word  "By "  as  given  in  the  preceding  form,  is 
omitted  from  the  corporate  signature  by  many  corporations. 
As  its  use  is,  however,  approved  by  the  leading  authorities  on 
corporation  law,  and  its  omission  may  under  some  circum- 
stances involve  a  personal  liability  for  the  officer  whose  name 
is  affixed,  and  as  the  word  is  employed  by  perhaps  the 
majority  of  the  best  conducted  corporations  of  the  country, 
the  form  given  is  regarded  as  preferable. 

The  president's  name  signed  in  the  blank  left  for  it  in  the 
above  form,  gives  the  simplest  form  of  corporate  signature, 
such  as  is  affixed  to  letters  and  other  documents  requiring 
but  little  formality.  For  important  instruments,  often,  though 
not  necessarily,  two  or  more  official  signatures  follow  the 
corporate  name,  and  the  seal  is  affixed,  as  shown  in  the  next 
form. 

Form  103. — Corporate  Signature.    Formal. 

THE  RANSOME  WHEEL  COMPANY, 

(  roRPORATF  )  By  J°HN  M-  WELLS. 

\  CORPORATE  /  President. 

HENRY  T.  WILKINS, 

Secretary. 

The  corporate  signature  may  be  legally  affixed  by  any 
corporate  officer  or  agent  authorized  thereto  by  the  directors 
or  by-laws,  though  in  all  current  business  where  but  one 
signing  officer  is  desired,  the  president  is  usually  designated. 

Where,  as  in  the  preceding  form,  the  secretary's  name 
appears  in  the  corporate  signature,  no  specific  attestation  of 
the  seal  is  necessary,  the  secretary's  participation  in  the 
signature  having  the  practical  effect  of  an  attestation  of  the 
seal.  Where,  however,  the  secretary  does  not  join  in  the 
corporate  signature — as  in  the  following  form — the  seal 
should  be  formally  attested. 


368  CORPORATE  MANAGEMENT. 

Form  104. — Corporate  Signature.    Seal  Attested. 


|  CORPORATE  1  THE  RANSOME  WHEEL  COMPANY, 

(      SEAL,      j  By  JOHN  M.  WELLS, 

President. 
ATTEST  SEAL  : 

HENRY  T.  WILKINS, 

Secretary. 


Where  the  corporate  signature  is  affixed  to  any  formal 
instrument,  it  is  customarily  preceded  by  a  testimonium 
clause  as  shown  in  the  following  forms : 

Form  105. — Testimonium  Clause.    Corporate  Signature. 


In  Witness  Whereof,  the  said  Staunton  Falls  Power  Com- 
pany has  caused  its  corporate  name  to  be  hereunto  sub- 
scribed by  its  President,  and  its  duly  attested  corporate 
seal  to  be  hereunto  affixed  by  its  Secretary,  all  in  the 
City  of  Staunton  Falls,  Massachusetts,  on  this  23d  day 
of  April,  1903. 

f  CORPORATE  ]  STAUNTON  FALLS  POWER  COMPANY, 

(     SEAL.      5  By  WILSON  M.  BROWN, 

President. 
ATTEST  SEAL  : 

HARVEY  B.  SMALL, 

Secretary. 


Form  1 06. — Testimonium  Clause.    Two  Corporate  Signatures. 

In  Witness  Whereof,  the  parties  to  this  agreement  have 
caused  their  respective  legal  corporate  signatures  and 
seals  to  be  hereunto  affixed,  all  being  done  in  the  City, 
County  and  State  of  New  York,  on  the  day  and  year 
first  above  written. 

J  CORPORATE  )  THE  AJAX  AXE  COMPANY, 

(      SEAL,      j  By  JAMES  BRIERSON, 

President. 
HENRY  M.  GERVAIS, 

Secretary. 

(  CORPORATE  )  ELLENVILLE  FORGE  COMPANY, 

\     SEAL.      )  By  JOHN  BRONSON, 

President. 
ATTEST  SEAL: 

JAMES  B.  SHELDON, 

Secretary. 


CORPORATE   AND  OfFICIAL  SIGNATURES.  269 

Form  107. — Testimonium  Clause.    Corporate  and  Individual 
Signatures. 

In  Witness  Whereof,  the  said  Staunton  Falls  Power  Com- 
pany, party  of  the  first  part,  has  caused  its  corporate 
seal  to  be  affixed  to  this  indenture  and  its  corporate 
signature  to  be  subscribed  thereunto  by  its  President 
and  Secretary,  and  the  said  party  of  the  second  part  has 
affixed  her  signature  and  seal  hereunto,  all  being  done  in 
the  City  of  Staunton  Falls,  Massachusetts,  on  the  day 
and  year  first  above  written. 

STAUNTON  FALLS  POWER  COMPANY, 
CORPORATE  )  By   WILSON    M.    BROWN, 

SEAL,      j  President. 

HARVEY  B.  SMALL, 

Secretary. 
JANET    B.    STILLSON.        [L.  s.] 


Form  108. — Testimonium  Clause.    By  Agent. 

In  Witness  Whereof,  the  said  Hilton  Wool  Cleaning  Com- 
pany, party  of  the  first  part,  acting  through  its  legally 
appointed  agent,  Morton  B.  Hubbard,  thereunto  duly 
authorized  by  resolution  of  its  Board  of  Directors 
(certified  copy  of  which  resolution  under  the  corporate 
seal  is  annexed),  has  hereunto  affixed  its  corporate 
signature,  and  Samuel  James,  party  of  the  second  part, 
has  hereunto  signed  his  name  and  affixed  his  seal,  all  on 
the  day  and  year  first  above  written. 

HILTON  WOOL  CLEANING  COMPANY, 
By  MORTON  B.  HUBBARD, 

Agent. 
SAMUEL  JAMES.        [L.  s.] 

A  copy  of  the  resolution  authorizing  the  agent  to  execute 
the  above  instrument  on  behalf  of  the  company,  duly  certified 
under  the  corporate  seal,  should  be  attached  thereunto,  thus 
making  -the  evidence  of  its  proper  execution  complete. 

Receipts  and  Drafts. 

In  corporate  receipts  and  drafts,  and  even  at  times  in 
notes,  we  find  the  same  variations  as  to  signature.  Receipts, 
drafts  and  vouchers  are  signed  by  the  treasurer  with  his 
official  signature,  the  corporate  name  being  conspicuous 
only  by  its  absence.  The  practice  is  so  common  that  it  can 
hardly  be  condemned,  but  where  such  signature  is  employed, 


270  CORPORATE  MANAGEMENT. 

the  body  of  the  receipt,  draft  or  voucher  should  display  the 
name  of  the  company  with  such  prominence  and  in  such 
manner  as  to  show  plainly  that  the  transaction  is  for  the 
company  account,  as  in  the  following  receipt : 

Form  109. — Corporate  Receipt.    Official  Signature. 

THE   SIMRELL   SPICE   COMPANY, 

53  West   St.,   New  York. 
$175.00  AUGUST  31,  1903. 

Received  from  the  J.  H.  Stinson  Company,  One  Hundred  Seventy- 
five  Dollars,  payment  in  full  for  consignment  of  July  15th,  1903. 

JESSE  B.  ERHARDT, 

Treasurer. 

The  name  of  the  company  is  frequently  printed  across  the 
face  of  the  receipt  at  the  left,  instead  of  as  given  above. 

The  better  form  of  signature  to  a  corporate  receipt  would 
be  as  follows : 

Form  no. — Corporate  Receipt.    Formal  Signature. 


d 


$125.00  NEW  YORK,  August  i,  1903. 

Received   of  the    Ocean   Hotel    Company,    One   Hundred 
Twenty-five  Dollars,  in  full  of  account. 

THE  HOTEL  SUPPLY  COMPANY, 

By  JOSEPH  H.  WILSON, 

Treasurer. 


Where  a  payment  is  evidenced  by  a  receipt  written  on  the 
bill  or  statement  itself,  the  same  variation  as  to  signature  is 
found.  The  better  form  is  the  regular  corporate  signature. 
Where,  as  is  usually  the  case,  the  signature,  with  the  excep- 
tion of  the  name  of  the  affixing  officer,  is  impressed  by  means 
of  a  rubber  stamp,  the  corporate  signature  requires  no  more 
writing  than  does  the  official  signature,  and  the  legal  status 
of  the  instrument  so  signed  is  unquestionably  better. 


CHAPTER   XXXVIII. 
COMMERCIAL  PAPER. 


Corporate  Notes. 

A  corporate  note  does  not  require  to  be  sealed.  It  may  be 
signed  by  any  officer  or  officers  properly  authorized  thereto. 
For  notes  given  in  the  regular  routine  of  business,  this  author- 
ity would  usually  be  conferred  upon  the  proper  officials  by  the 
by-laws  or  by  custom.  For  large  amounts,  or  for  special  trans- 
actions outside  the  usual  routine,  this  authorization  would  be 
given  by  resolution  or  motion  of  the  board  of  directors.  The 
recipient  of  a  corporate  note  must — if  the  matter  be  outside  of 
the  regular  transactions  of  the  corporation — assure  himself  that 
the  signing  officer  is  duly  authorized.  If  he  were  not  so  author- 
ized, the  note  might  not  bind  the  corporation. 

The  signature  to  a  corporate  note  must  be  the  corporate 
signature.  Any  other  signature  may  invalidate  the  note  as 
against  the  corporation,  and  may  involve  the  official  signing 
such  note  in  a  personal  liability  as  the  maker  or  endorser  of 
the  note. 

Form  in. — Corporate  Note.     Signature  by  President. 


$1,000.00  NEW  YORK,  January  15,  1903. 

Sixty  days  after  date  the  Armour  Land  Company  promises  to  pay  to 
the  order  of  William  B.  Emerson  the  sum  of  One  Thousand  Dollars. 
Value  received. 

ARMOUR  LAND  COMPANY, 

By  JOHN  LAMONT, 

President. 


271 


272  CORPORATE  MANAGEMENT. 

Form  112. — Corporate  Note.     Signature  by  Treasurer. 

$1,500.00  NEWARK,  NEW  JERSEY,  July  i,  1903. 

Three  months  after  date  the  Allen  Manufacturing  Company  promises 
to  pay  to  the  order  of  William  H.  Strauss  the  sum  of  Fifteen  Hundred 
Dollars,  with  interest  from  date  until  paid,  at  the  rate  of  5  per  cent,  per 
annum. 

Value  received. 

THE  ALLEN  MANUFACTURING  COMPANY, 

By  JAMES  H.  WELLS, 

Payable  at  the  Treasurer. 

SEABOARD  NATIONAL  BANK 
of  New  York  City. 

Form  113. — Corporate  Note.     Collateral  Security. 

$15,000.00  NEW  YORK,  March  5,  1903. 

Six  months  after  date  the  Berwick  Mercantile  Company  promises  to 
pay  to  the  order  of  Willis  P.  Morton,  at  the  Third  National  Bank  of  this 
City,  the  sum  of  Fifteen  Thousand  Dollars,  in  gold  coin  of  the  United 
States  of  the  present  weight  and  fineness,  with  interest  from  date  until 
paid  at  the  rate  of  five  per  cent,  per  annum,  payable  in  like  coin. 

And  the  said  Berwick  Mercantile  Company  doth  herewith  deposit 
with  the  said  Willis  P.  Morton,  as  collateral  security  for  the  due  pay- 
ment of  the  foregoing  promissory  note,  Five  Hundred  Shares  of  its  stock 
in  five  certificates,  each  for  One  Hundred  Shares  and  numbered  respect- 
ively 55,  56,  57,  58  and  59,  said  certificates  standing  in  the  name  of  Mark 
Baldwin,  Treasurer  of  the  said  Berwick  Mercantile  Company,  and 
endorsed  by  him  in  blank  upon  the  back  of  each  certificate. 

And  in  the  event  that  this  note,  or  the  interest  thereon,  shall  not  be 
paid  when  due,  the  said  Berwick  Mercantile  Company  hereby  appoints 
and  constitutes  the  said  Willis  P.  Morton  its  attorney  in  fact  and  irre- 
vocably,  with  power  of  substitution,  to   sell   at  any  time  after  this   said 
note  or  any  interest  thereon  is  due  and  unpaid,  with  or  without  notice, 
and   either   at   public   or   private   sale,   the   whole   or   any   part  of  said 
securities,  the  proceeds  thereof  to  be  applied  to  the  payment  of  the  said 
promissory  note,  any  interest  due  thereon,  and  any  commissions  prop- 
erly payable  on   the  sales   of  said  securities  so  sold,   and  any  surplus 
remaining  thereafter,  either  of  cash  or  of  the  said  securities,  to  belong 
to  and  be  subject  to  the  order  of  the  said  Berwick  Mercantile  Company. 
In  Testimony  Whereof,  the  corporate  signature  of  the  said 
Berwick  Mercantile  Company  is  hereunto  affixed  by  its 
President  and  Treasurer,   duly  authorized  thereto  by  a 
resolution  of  the  Board  of  Directors  of  said  Company, 
passed  at  a  regular  meeting  of  said  Board,  held   Feb- 
ruary 23,   1903,  duly  certified  copy  whereof  is  hereunto 
attached. 

BERWICK  MERCANTILE  COMPANY, 
By  HENRY  S.  CORBIN, 

President. 
AMOS  C.  HALLOCK, 

Treasurer. 


COMMERCIAL  PAPER.  278 

For  form  of  certified  resolution  to  be  attached  to  above 
note,  see  Form  129. 

There  is  no  peculiar  form  for  corporate  drafts.  The  usual 
form  with  corporate  signature  is  as  follows: 

Form  114. — Corporate  Draft.     Formal  Signature. 


c    o 
o  >H 


c 


U    * 


O 

l- 

PQ 


$2,500.00  NEW  YORK,  August  3,  1903. 

At  sight  pay  to  the  order  of  the  Elton  Wool  Spinning 
Company  the  sum  of  Two  Thousand  Five  Hundred  Dollars, 
and  charge  to  our  account. 

THE  WELLS  CONSTRUCTION  COMPANY, 

By  WILBUR  S.  HASTINGS, 

To  SIMPSON  &  ELLIS,  Treasurer. 

156  Chestnut  St., 
Philadelphia,  Pa. 


Corporate  Checks. 

Funds  belonging  to  a  corporation  should  always  be  de- 
posited in  the  name  of  the  company,  and  checks  against  such 
funds  should  be  signed  in  such  manner  as  may  be  prescribed  in 
the  by-laws.  To  allow  the  treasurer — as  is  frequently  done  in 
the  smaller  corporations — to  deposit  the  company  funds  in  his 
own  name  as  treasurer  and  to  draw  on  them  by  check,  signed 
merely  with  his  official  signature,  is  to  invite  irregularity. 

The  signature,  or  signatures,  to  a  corporate  check  are  not 
of  the  same  importance  as  in  the  case  of  other  corporate  instru- 
ments. There  is  no  question  of  liability  as  in  the  case  of  a 
wrung  form  of  signature  to  a  note  or  contract.  The  signatures 
to  a  check  are  merely  for  the  purpose  of  identification,  and  any 
method  of  signature  prescribed  in  the  by-laws  and  recognized 
by  the  company's  bank  is  sufficient.  Even  here,  however,  there 
seems  no  good  reason  why  the  formal  signature  of  the  corpora- 
tion should  not  be  employed. 
18 


CORPORATE  MANAGEMENT. 


The  name  of  a  corporation  issuing  a  check  is,  as  a  rule, 
plainly  printed  or  engraved  upon  the  face  of  such  check. 
Usually  this  name  is  placed  across  the  left  hand  end. 

The  corporate  seal  is  seldom  if  ever  used  on  checks,  though 
its  use  would  not  affect  the  check  in  any  way. 

Where  the  by-laws  provide  that  checks  shall  be  signed  by 
the  president  and  treasurer  with  the  corporate  signature,  the 
word  "  By  "  is  rarely  used  before  the  official  signatures.  The 
following  is  a  convenient  and  much  used  form  : 

Form  115.  —  Check.     Corporate  Signature. 


o 
U 


o. 
in 

B 
O 


No.  335.  NEW  YORK,  February  20,  1903. 

SEABOARD  NATIONAL  BANK. 
18  Broadway. 

Pay  to  the  order  of  Thomas  W.  Holmes,          $500.00 
Five  Hundred Dollars. 

THE  WILLISTON  SPICE  COMPANY, 

JOHN  S.  MERRILL,  President. 
HENRY  S.  BROWN,  Treasurer. 


The  check  number  is  frequently  placed  in  the  upper  right- 
hand  corner.  Such  arrangement,  with  the  other  details  as 
shown  in  the  form  just  given,  is  highly  approved  by  bank 
officials,  as  it  brings  all  the  essential  features  of  the  check — 
number,  date,  amount,  payee  and  signature — all  on  the  right- 
hand  side  of  the  check  in  the  most  convenient  position  for  rapid 
reference.  This  general  arrangement  is  observed  in  Form  118. 

It  may  be  noted  that  where  the  signatures  permit,  the  figures 
showing  the  amount  of  a  check  are  very  frequently  placed  in  the 
lower  left-hand  corner  instead  of  to  the  right  as  shown  above. 

If  the  by-laws  authorized  the  treasurer  alone  to  sign  the 
corporate  name  to  checks,  the  form  would  be  the  same  as  the 
above  with  the  omission  of  the  president's  name. 

Where  the  by-laws  require  the  corporate  name  to  be  affixed 


COMMERCIAL  PAPER. 


275 


by  the  treasurer  and  the  check  is  to  be  countersigned  by  the 
president,  the  following  form  is  approved: 

Form  1 1 6. — Check.     Corporate  Signature.     Countersigned. 


™  2 

0« 


No.  245.  NEW  YORK,  January  7,  1903. 

THE  CENTRAL  NATIONAL  BANK, 
of  the  City  of  New  York. 

Pay  to  the  order  of  Jasper  T.   Sheldon           $350.00 
Three   Hundred,   Fifty Dollars 

MONTAUK  ICE  COMPANY, 
Countersigned.  By  HENRY  P.  WISE, 

JOHN  W.  STYLES,  Treasurer. 

President. 


Frequently  the  countersignature  is  written  across  the  end 
of  the  check  or  even  across  its  face.  For  reasons  of  con- 
venience in  handling  the  check,  neither  of  these  methods  is  to 
be  recommended. 

Where  the  by-laws  merely  require  the  official  signatures  of 
the  treasurer  and  president  to  the  corporate  check,  the  form 
would  be  as  follows : 

Form  117. — Check.     Official  Signature. 


t 
ai 


— •    IT) 

w" 


No.  222.  NEW  YORK,  March  24,  1903. 

KNICKERBOCKER  TRUST  COMPANY, 

Through  the  New  York  Clearing  House. 
Pay  to  the  order  of  Nettie  James  $5° 

Fifty  


WILLIS  SEMPLE, 

President. 


Dollars 

HENRY  W.  CRUIKSHANK, 

Treasurer. 


Frequently  where  the  official  signatures  of  president  and 
treasurer  are  required  as  above,  the  two  names  will  be  signed 
on  the  lower  right  hand  side  of  the  check,  one  below  the  other, 
as  in  the  following  form : 


276  CORPORATE  MANAGEMENT. 

Form  1 1 8. — Check.     Official  Signatures.     Purpose  Stated. 


bo 
•gfc 

3     - 


«o 

§£ 

<n  „ 
(/) 


NEW  YORK,  February  2,  1903. 
MANHATTANVILLE    NATIONAL    BANK 

of  New  York  City.  No.  186. 

Pay  to  the  order  of  Merrick  &  Small           $575.25 
Five   Hundred,    Seventy-five   25/100 Dollars. 


In  full  for  Dynamo. 


WILLIS   B.   STILSON,   Treasurer. 
HARVEY  M.  HILTON,   President. 


There  is  no  objection  to  the  entry  on  a  check  of  the  purpose 
for  which  it  is  issued,  if  placed  so  as  not  to  obscure  or  interfere 
with  the  body  of  the  check,  and  in  the  smaller  corporations 
where  the  system  of  vouchers  and  receipts  does  not  obtain,  the 
plan  is  sometimes  very  convenient.  The  check  then  takes  the 
place  of  the  ordinary  voucher,  showing  just  what  the  payment 
was  for,  and,  as  it  must  be  endorsed  by  the  payee  before  collec- 
tion, serving  as  a  receipt  as  well. 

Form  119. — Check.     Draft  Form, 

THE  MILLING  COMPANY  OF  NEW  YORK, 

18  Reade  Street. 

No.  1505.  NEW  YORK,  December  13,  1903. 

Pay  to  the  order  of  James  H.  Woolston  $325.25 

Three  Hundred,  Twenty-five  25/100 Dollars. 

THE  MILLING  COMPANY  OF  NEW  YORK, 

By  JAMES  F.  HOADLEY, 

To  THE  SEABOARD  NATIONAL  BANK,  Treasurer. 

NEW  YORK. 

This  form  of  check  is  used  extensively  and  is  regarded  with 
much  favor  by  the  drawers  of  checks  since  the  most  prominent 
feature — instead  of  being  the  name  of  the  bank  as  in  the  ordi- 
nary check  form — is  the  name  of  the  concern  drawing  the  check, 
a  matter  of  some  importance  from  an  advertising  standpoint. 
The  form  lends  itself  readily  to  clear  and  tasteful  arrangement 
and  would  seem  to  have  no  objectionable  features. 


COMMERCIAL  PAPER.  277 

Form  120. — Endorsement  of  Check  payable  to  Corporation. 


gas 
u  g  S 

45  H 
*  ffi 

c/3  & 
n 

c/j    o 


This  is  the  ordinary  formal  corporate  endorsement,  usually 
affixed  by  the  treasurer  or  cashier,  though  the  president  is 
sometimes  authorized  thereto. 

For  deposit  or  collection,  the  following  form  of  endorse- 
ment is  preferred  by  the  banks : 

Form  121. — Endorsement  of  Check  for  Deposit. 


>•       i-i 

%      •- 


Ji  <   o   J 

lauw 

<u  h  ^  2; 

Is  *£ 
">> w  ° 

£  i  ^ 

u 


This  form  of  endorsement  is  usually  affixed  in  its  en- 
tirety— corporate  name,  official  signature  and  all — with  a  rub- 
ber stamp.  Such  endorsement  is,  on  account  of  the  rapidity 
and  convenience  with  which  it  may  be  applied,  employed  by 
almost  all  corporations. 


CHAPTER  XXXIX. 
ACKNOWLEDGMENTS,  CERTIFICATES,  ETC. 


A  corporation  does  not  acknowledge  signatures  or  the  exe- 
cution of  instruments  in  its  own  name,  but  only  through  its 
officers.  Each  state  has  its  own  forms  of  acknowledgment. 
In  New  York,  the  general  form  is  as  follows : 

Form  122. — Notarial  Acknowledgment.     New  York. 

STATE    OF    NEW    YORK,  \ 
County  of  New  York,    ]**" 

On  this  I5th  day  of  January,  in  the  year  1903,  before  me  personally 
came  John  T.  Hilton,  to  me  known,  who  being  by  me  duly  sworn,  did 
depose  and  say  that  he  resided  in  the  City  of  New  York;  that  he  is  the 
President  of  the  Hilton  Wool  Cleaning  Company,  the  corporation 
described  in  and  which  executed  the  above  instrument;  that  he  knew  the 
seal  of  said  corporation;  that  the  seal  affixed  to  said  instrument  was  such 
corporate  seal  and  that  it  was  so  affixed  by  order  of  the  Board  of  Direc- 
tors of  said  corporation,  and  that  he  signed  the  corporate  name  thereto 
by  like  order. 

JOHN  T.  HILTON. 
Sworn  to  before  me  this  15th  ) 
day  of  January,   1903.         j 

JOHN  WISE, 

(  NOTARIAL  (  Notary  Public 

I     SEAL,     j  for  New  York  County. 

Had  the  treasurer  joined  with  the  president  in  the  corporate 
signature,  the  last  clause  of  the  above  form  might  be  modified 
to  read : 

"  and  that  he,  as  president  of  said  corporation,  with  the 
treasurer,  signed  the  corporate  name  thereto  by  like 
order." 

273 


ACKNOWLEDGMENTS,   CERTIFICATES,   ETC.  279 

Form  123. — Notarial  Acknowledgment.     New  Jersey. 


STATE  OF  NEW  JERSEY, 
County  of  Essex, 

Be  It  Remembered,  that  on  this  i6th  day  of  February,  in  the  year  of 
our  Lord  one  thousand  nine  hundred  and  three,  before  me,  a  Master  of  the 
Court  of  Chancery  of  the  State  of  New  Jersey,  personally  appeared 
Robert  J.  Thompson,  to  me  known,  who,  being  by  me  duly  sworn  accord- 
ing to  law,  doth  depose  and  make  proof  to  my  satisfaction  that  he  knows 
the  corporate  seal  of  the  Buena  Vista  Gold  Mining  Company,  the  grantor 
in  the  foregoing  deed  named;  that  the  seal  affixed  to  said  deed  is  the 
proper  corporate  seal  of  said  company;  that  James  K.  Edwards  was  at 
the  time  of  the  execution  of  said  deed  the  President  of  said  Company, 
and  that  the  said  deed  was  signed,  sealed  and  delivered  by  him  as  such 
President,  in  the  presence  of  the  said  deponent,  as  the  voluntary  act  and 
deed  of  said  company,  and  that  said  deponent  thereupon  subscribed  his 
name  as  a  witness  thereto. 

All  of  which  I  certify. 

GEORGE  M.  HOLM  AN, 
Master  in  Chancery  of  New  Jersey. 

This  acknowledgment  in  New  Jersey  should  be  made  by  a 
subscribing  witness,  and  it  is  usually  most  convenient  to  have 
it  made  by  the  secretary  as  he  is  familiar  with  the  seal  and 
could  identify  the  president.  In  other  states  it  would  be  neces- 
sary to  obtain  the  special  form  prescribed  by  the  statutes  of 
the  particular  state. 

Form  124. — Treasurer's  Affidavit  to  Financial  Statement. 

STATE    OF    NEW     YORK,  )       . 
County  of  New  York,     J 

On  this  i8th  day  of  March,  1903,  personally  appeared  before  me, 
a  Notary  Public  in  and  for  the  County  of  New  York,  John  B.  Dillon, 
Treasurer  of  the  Merrick  Oil  Company,  who,  being  duly  sworn,  did 
depose  and  say  that  he  has  full  charge  and  control  of  the  books  and 
accounts  of  said  Company;  that  the  above  and  foregoing  statement  is 
taken  from  said  books  and  accounts;  that  it  is  a  true  and  accurate  tran- 
script therefrom,  and  that,  to  the  best  of  his  knowledge  and  belief,  it  is 
a  just  and  correct  presentation  of  the  financial  condition  of  said  Com- 
pany on  this  date. 

JOHN  B.  DILLON, 

Treasurer. 

Sworn  to  and  subscribed  before  me 
the  day  and  year  aforesaid. 

ALLEN  A.  SILVERTON, 

JTARIAL  )  Notary  Public  for 

SEAL,     j  New  York  County. 


i 


280  CORPORATE  MANAGEMENT. 

Any  statement,  report,  notice  or  other  document  prepared 
by  any  of  the  officers  of  a  corporation  and  requiring  an  affi- 
davit, is  ordinarily  certified  to  by  the  officer  by  whom  it  was 
prepared,  though  any  other  officer  having  sufficient  knowledge 
of  the  matter  might  act. 

The  official  affidavits  to  the  corporation  reports  required  by 
statute  in  the  State  of  New  York  are  similar  to  the  foregoing. 

Where  any  meeting  is  of  special  importance,  the  secretary  is 
usually  required  to  submit  a  copy  of  the  notice  sent  out  for  such 
meeting,  together  with  his  formal  certificate  that  such  notice 
was  so  sent  out  in  accordance  with  the  provisions  of  the 
by-laws.  The  form  of  certification  is  as  follows : 

Form  125. — Secretary's  Certificate  to  Due  Service  of  Notice  of 
Meeting. 


I,  the  undersigned,  Secretary  of  the  Albion  Plow  Share  Company, 
do  hereby  certify  that,  in  accordance  with  the  by-law  requirements  of 
said  Company,  a  copy  of  the  foregoing  notice,  properly  enclosed  and 
directed  and  with  postage  prepaid,  was  by  me  mailed  to  the  last  known 
post-office  address  of  each  stockholder  of  record  of  this  Company,  not 
less  than  ten  days  before  the  time  of  meeting  announced  in  said  notice. 

GEORGE  H.  LYNDE, 

NEW  YORK  CITY,  Secretary. 

April  isth,  1903. 


Where  the  meeting  is  of  unusual  importance  or  formality, 
the  secretary  might  be  required  to  make  affidavit  to  the  proper 
service  of  notice.  In  such  case  the  form  of  affidavit  would  be 
as  follows : 

Form  126. — Secretary's  Affidavit  to  Due  Service  of  Notice  of 
Meeting. 


STATE  OF  NEW  YORK, 
County  of  New  York, 

On  this  fifteenth  day  of  April,  1903,  before  me  personally  appeared 
George  H.  Lynde,  Secretary  of  the  Albion  Plow  Share  Company,  who, 
being  duly  sworn,  did  depose  and  say  that  on  the  fourth  day  of  April, 


ACKNOWLEDGMENTS,   CERTIFICATES,   ETC.  381 

1903,  a  copy  of  the  attached  notice,  properly  enclosed  and  directed  and 
with  postage  prepaid,  was  by  him  mailed  to  the  last  known  post  office 
address  of  every  stockholder  of  record  of  the  said  corporation. 

GEORGE  H.  LYNDE, 

Secretary. 

Sworn  to  and  subscribed  before  me  1 
the  day  and  year  aforesaid.          f 

JEREMIAH  N.  ANDERSON, 

j  NOTARIAL  )  Notary  Public  in  and  for 

(     SEAL,     j  New  York  County. 


In  either  of  these  cases  a  copy  of  the  notice  in  question 
would  precede  the  certificate  or  affidavit  on  the  same  sheet  or 
would  be  attached  thereto.  Where  notice  is  given  by  publica- 
tion, the  best  evidence  that  such  notice  has  been  properly  given 
is  furnished  by  copies  of  the  papers  in  which  such  notice 
appeared.  Where  these  papers  are  preserved  no  formal  certifi- 
cate or  affidavit  as  to  the  publication  of  the  notice  is  usually 
required.  If,  however,  merely  the  notice  itself  is  preserved, 
clipped  from  the  paper,  a  certificate  would  be  necessary  as  in 
the  case  of  the  written  notice.  The  form  of  this  affidavit  would 
be  as  follows : 

Form  127. — Secretary's  Affidavit  to  Publication  of  Notice  of 
Meeting. 


STATE  OF  NEW  YORK, 
County  of  New  York, 

On  this  20th  day  of  January,  1903,  before  me  personally  appeared 
George  H.  Lynde,  Secretary  of  the  Albion  Plow  Share  Company,  who, 
being  duly  sworn,  did  depose  and  say  that  the  annexed  notice  was  pub- 
lished in  the  New  York  Times  on  the  6th  day  of  January,  1903,  and  on 
the  I3th  day  of  January,  1903. 

GEORGE  H.  LYNDE, 

Secretary. 

Sworn  to  and  subscribed  to  before  me  1 
the  day  and  year  aforesaid.  j 

JEREMIAH  N.  ANDERSON, 

|  NOTARIAL  )  Notary  Public  in  and  for  the 

(      SEAL,     j  County  of  New  York. 

In  active  corporations  the  secretary  is  very  frequently  called 
upon  to  give  certified  copies  of  proceedings,  resolutions,  etc. 


282  CORPORATE  MANAGEMENT. 

The  following  will  give  the  general  form  for  these  certifica- 
tions : 

Form  128. — Certified  Extract  from  By-laws. 

MARSTON   MANUFACTURING   COMPANY. 


EXTRACT  FROM  BY-LAWS. 


ARTICLE  VI. — BUSINESS. 

"  I.  The  President  shall  have  full  power  and  authority  to  sign  with 
the  corporate  signature  any  and  all  contracts  or  other  instruments  that 
may  be  necessary  for  the  transaction  of  the  regular  business  of  this 
Company." 

I,  Henry  Cornell,  Secretary  of  the  Marston  Manufacturing  Company, 
do  hereby  certify  that  the  above  is  a  true  and  correct  copy  of  Section  I, 
Article  VI.,  of  the  duly  adopted  by-laws  of  this  Company,  and  in  testi- 
mony thereof  I  have  hereunto  affixed  my  official  signature  and  the  seal 
of  the  Company  in  the  City  of  Brooklyn  on  this  I2th  day  of  June,  1903. 

HENRY  CORNELL, 

Secretary. 
J  CORPORATE  ? 

(       SEAL.        j 


Form  129. — Certified  Resolution.     To  Open  Bank  Account. 

MARSTON   MANUFACTURING   COMPANY. 


RESOLUTION. 


"  Resolved,  That  the  Treasurer  be  and  hereby  is  authorized  and 
instructed  to  open  an  account  for  the  Company  with  the  Seaboard 
National  Bank  of  New  York  City,  and  to  deposit  therein  all  the  funds 
of  the  Company  coming  into  his  custody;  such  account  to  be  in  the  name 
of  the  Company,  and  funds  deposited  therein  to  be  withdrawn  only  by 
check  signed  by  the  Treasurer  and  countersigned  by  the  President." 


I,  Henry  Cornell,  Secretary  of  the  Marston  Manufacturing  Company, 
do  hereby  certify  that  the  foregoing  is  a  true  and  accurate  transcript  of  a 
resolution  duly  passed  at  the  first  meeting  of  the  Board  of  Directors  of 
said  Company,  held  in  the  office  of  Morris  P.  Marston,  165  Grand  Street, 
Brooklyn,  New  York,  at n  A.  M.,  on  the  loth  day  of  June,  1003,  said 
transcript  being  taken  from  the  minutes  of  the  proceedings  of  that  meet- 


ACKNOWLEDGMENTS,  CERTIFICATES,  ETC.  283 

ing;  and  that  Morris  P.  Marston  is  the  duly  elected  President  and  Henry 
Cornell  is  the  duly  elected  Secretary  of  said  Company. 

In  Testimony   Whereof,   I   have  hereunto  affixed  my  official 
signature  and   the  seal  of  the   Company,  in  the   City  of 
Brooklyn,  this  I5th  day  of  June,  1903. 
(  CORPORATE  )  HENRY  CORNELL, 

I     SEAL,      j  Secretary. 


This  resolution,  as  certified,  would  be  filed  with  the  desig- 
nated bank  at  the  time  the  account  was  opened,  and  would  be  the 
bank's  authority  for  the  recognition  of  the  official  checks. 

Where  bonds  or  other  securities  are,  as  is  frequently  the 
case,  in  the  hands  of  a  trustee,  or  some  institution  acting  as 
trustee,  any  negotiation  or  delivery  of  such  securities  would 
only  be  made  on  demand  of  the  proper  parties  accompanied  by 
duly  authenticated  evidence  of  their  authority  to  act  in  the 
premises.  The  following  certified  resolution  covers  this 
ground : 

Form    130. — Certified    Resolution.     Authorizing   Delivery   of 
Bonds. 

ELLIS   MILLING   COMPANY. 


"  Resolved,  That  the  proper  officers  of  this  Company  be  hereby 
authorized  and  instructed  to  assign  and  transfer  to  Henry  W.  Wellman, 
of  Johnsville,  South  Carolina,  as  part  payment  for  the  Wellman  Cotton 
Mills,  Bonds  of  this  Company  to  the  face  value  of  Thirty-six  Thousand 
Eight  Hundred  Dollars  ($36,800),  said  bonds  being  already  issued  and 
being  held  for  account  of  this  Company  and  subject  to  its  order,  by  the 
Brandon  Trust  Company  of  New  York  City." 


This  is  to  certify  that  the  foregoing  is  a  true  and  accurate  transcript 
of  a  resolution  passed  at  a  meeting  of  the  Board  of  Directors  of  the 
Ellis  Milling  Company,  held  in  the  office  of  the  Company,  in  New  York 
City,  on  the  2nd  day  of  September,  1903,  all  as  shown  by  the  minutes 
thereof. 

In  Testimony  Whereof,  I  have  hereunto  affixed  my  official  sig- 
nature and  the  corporate  seal  of  the  said  Company,  this 
5th  day  of  October,  1903. 

FRANKLYN  MARKHAM, 

Secretary. 

J  CORPORATE  | 
\        SEAL.        j 


284  CORPORATE  MANAGEMENT. 

If  the  trustee  holding  the  bonds  affected  by  the  above  resolu- 
tion were  inclined  to  be  technical,  a  notarial  acknowledgment 
of  the  foregoing  resolution  might  be  required.  In  such  case  the 
form  would  be  as  follows : 


Form  131. — Notarial  Acknowledgment  to  Certified  Resolution. 


STATE  OF  NEW  YORK,  ) 
County  of  New  York,    §*• 

Personally  appeared  before  me  this  5th  day  of  October,  1903,  Franklyn 
Markham,  to  me  well  known,  and  acknowledged  that  he  signed  the  fore- 
going certified  resolution  and  affixed  the  seal  of  the  Ellis  Milling  Com- 
pany thereto,  as  Secretary  of  the  said  Company,  for  the  purposes  as 
therein  set  forth,  and  I  have  personally  examined  the  Minutes  of  said 
Company  under  said  date  of  September  2nd,  1003,  and  certify  that  the 
foregoing  resolution  is  correctly  transcribed  therefrom. 

MAURICE  MASON, 

NOTARIAL  I  Notary  Public  for  New  York  County. 

SEAL.     ) 


Form  132. — Certified  Transcript  from  Minutes. 
ELLIS   OIL   COMPANY. 


TRANSCRIPT  OF  MINUTES.    SPECIAL  MEETING  OF  DIRECTORS. 

"  Pursuant  to  call  and  notice,  the  Board  of  Directors  of  the  Ellis  Oil 
Company  met  in  special  meeting  in  the  office  of  the  Company,  March  12, 
1903,  at  2  P.  M.  President  James  Hansell  presided,  Secretary  Stahlman 
officiated  as  recording  officer,  etc."  (Balance  of  Minutes  would  follow.) 


I,  the  undersigned,  Secretary  of  the  Ellis  Oil  Company,  do  hereby 
certify  that  the  above  and  foregoing  is  a  true  and  accurate  transcript  of 
the  minutes  of  the  proceedings  at  the  special  meeting  of  the  Board  of 
Directors  of  said  Company,  held  in  the  office  of  the  Company  on  the 
I2th  day  of  March,  1903,  at  2  P.  M.,  to  consider  and  act  upon  a  proposi- 
tion to  purchase  the  oil  wells  of  the  Beaumont  Producer  Company. 

In  Testimony  Whereof,  I  have  affixed  hereunto  my  official 
signature  and  the  seal  of  this  Company,  in  the  City  of 
New  York,  on  this  the  i6th  day  of  March,  1003. 

JAMES  T.  STAHLMAN, 
CORPORATE  |  Secretary. 

SEAL.        j 

The  president  might  with  propriety,  if  desired,  unite  with 
the  secretary  in  the  certification  of  any  specially  important 


ACKNOWLEDGMENTS,  CERTIFICATES,   ETC.  285 

transcripts.     In  such  case  the  joint  certification  would  be  as 
follows : 


Form  133. — Certification  of  Minutes.    President  and  Secretary. 


We,  the  undersigned,  President  and  Secretary,  respectively,  of  the 
Ellis  Oil  Company,  do  hereby  certify  that  the  above  and  foregoing  is 
a  true  and  accurate  transcript  of  the  minutes  of  the  proceedings  at  the 
special  meeting  of  the  Board  of  Directors  of  said  Company,  held  in  the 
office  of  the  Company  on  the  I2th  day  of  March,  1903,  at  2  p.  M.,  to 
consider  and  act  upon  a  proposition  to  purchase  the  oil  wells  of  the 
Beaumont  Producer  Company. 

In  Testimony  Whereof,  we  have  hereunto  affixed  our  official 
signatures  and  the  seal  of  the  Company,  in  the  City  of 
New  York,  on  this  the  i6th  day  of  March,  1903. 

EARL  G.  RANSOME, 

President. 
CORPORATE  1  JAMES  T.  STAHLMAN, 

SEAL.      |  Secretary. 


Should,  as  is  sometimes  the  case,  an  affidavit  be  required  as 
to  the  authenticity  of  a  transcript  from  the  minutes,  the  form 
would  be  as  follows,  this  affidavit  either  immediately  following 
or  taking  the  place  of  the  certification : 

Form  134. — Secretary's  Affidavit  to  Certified  Minutes. 


STATE     OF     NEW  YORK, 
County  of  New  York, 

On  this  i6th  day  of  March,  1003,  before  me  personally  appeared 
James  T.  Stahlman,  who,  being  duly  sworn,  did  depose  and  say  that  he 
is  the  Secretary  of  the  Ellis  Oil  Company;  that  he  was  present  at  the 
special  meeting  of  the  Directors  of  that  Company  held  in  the  office  of 
the  Company  on  the  I2th  day  of  March,  1003;  that  he  recorded  the  pro- 
ceedings of  said  meeting  in  the  Minute  Book  of  said  Company,  and  that 
the  above  and  foregoing  transcript  is  a  true  and  correct  copy  of  the 
minutes  so  recorded. 

JAMES  T.  STAHLMAN, 

Secretary. 

Sworn  to  and  subscribed  before  me  on  ) 
the  day  and  year  above  stated.         } 

OTARIAL  1  HENRY  M.  PARKER, 

SEAL.      5  Notary  Public  in  and  for 

New  York  County. 


CORPORATE  MANAGEMENT. 


If  desired,  the  president  might  join  with  the  secretary  in  the 
above  affidavit. 

Form  135. — Secretary's  Certificate  to  Election  of  Treasurer. 


This  is  to  certify  that  at  an  adjourned  meeting  of  the  Board  of  Direct- 
ors of  the  Ellis  Milling  Company  held  in  the  City  of  New  York  on  the 
i6th  day  of  November,  1903,  the  resignation  of  Mr.  Daniel  McKee  as 
Treasurer  of  the  Company  was  presented  to  the  meeting,  and  on  motion 
duly  made  and  seconded  was  accepted,  and  that  thereupon  Mr.  Tracy 
W.  Williams  was  nominated  to  fill  the  position  left  vacant  by  Mr.  Mc- 
Kee's  resignation,  and  was  elected  by  the  unanimous  vote  of  all  present, 
and  that  the  said  Tracy  W.  Williams  is  now  the  Treasurer  of  the  said 
Ellis  Milling  Company. 

In  Testimony  Whereof,  I  have  hereunto  affixed  my  official 
signature  and  the  corporate  seal  of  the  said  Company 
this  17th  day  of  November,  1903. 

FRANKLYN  MARKHAM, 

Secretary. 


This  certificate  would  be  filed  with  the  bank  and  would, 
in  connection  with  the  original  resolution  fixing  the  signature 
of  the  corporate  check,  be  the  bank's  authority  for  recognizing 
checks  bearing  the  signature  of  the  new  treasurer. 


CHAPTER  XL. 
CORPORATE  POWERS  OF  ATTORNEY. 


The  general  form  of  the  corporate  power  of  attorney  is 
the  same  as  that  of  the  ordinary  form,  differing  only  in  those 
details  directly  incident  to  the  corporate  participation. 

The  degree  of  formality  of  the  various  powers  of  attorney 
— corporate  or  otherwise — differs  greatly  according  to  the 
nature  of  the  instrument,  from  the  simple  proxy  to  the  au- 
thorization to  convey  land,  which  requires  the  same  formal 
execution  and  acknowledgment  as  does  the  deed  itself. 

It  may  be  noted  here  that  in  the  power  of  attorney — as  in 
most  legal  forms — much  verbiage  might  be  omitted  and  a 
simpler  document  drawn  that  would,  from  a  strictly  legal 
standpoint,  be  equally  binding  and  effective.  From  a  prac- 
tical standpoint,  however,  such  documents  would  not  answer 
so  well,  for  to  omit  the  familiar  verbiage  sanctioned  by  time, 
usage  and  adjudication,  would  create  dissatisfaction  and  arouse 
suspicion.  On  this  account  it  is  safer  and  better  to  use  the 
customary  forms. 

The  following  powers  of  attorney  require  little  or  no 
explanation,  as  their  intent  and  use  is  obvious.  For  the  form 
of  testimonium  or  signature,  where  documents  are  executed 
for  corporations  by  their  agents  appointed  by  power  of  attor- 
ney, see  Form  108,  Chapter  XXXVII. 

Speaking  generally,  a  power  of  attorney  may  be  revoked 
at  any  time  by  the  principal. 

A  corporate  power  of  attorney  should  always  be  accom- 
panied by  a  certified  copy  of  the  resolutions  by  which  it 
was  authorized.  (See  Form  129.) 

287 


288  CORPORATE  MANAGEMENT. 

Form  136. — Corporate  Power  of  Attorney.     To  Collect  Money. 
POWER  OF  ATTORNEY. 


Know  All  Men  By  These  Presents,  That  the  Tucson  Cattle  Com- 
pany, a  corporation  duly  organized  under  the  laws  of  Arizona,  does 
hereby  make,  constitute  and  appoint  Henry  W.  Gardes,  of  the  City  of 
New  York,  its  true  and  lawful  attorney,  for  it  and  in  its  name,  place  and 
stead,  to  collect  and  receive  from  the  New  York  Drovers'  Association, 
of  New  York  City,  the  sum  of  Three  Thousand  Dollars  ($3,000),  with 
interest  thereon  at  the  legal  rate  from  the  first  day  of  January,  1903, 
said  amount  being  due  and  payable  the  Tucson  Cattle  Company  for  and 
on  account  of  cattle  shipped  the  said  New  York  Drovers'  Association 
during  the  month  of  December,  1902;  and  the  said  Henry  W.  Gardes  is 
hereby  fully  authorized  and  empowered,  for  and  on  account  of  the  said 
Tucson  Cattle  Company  and  in  its  name,  to  collect  and  receipt  for  the 
said  Three  Thousand  Dollars  ($3,000)  and  the  interest  thereon  as  afore- 
said, in  whole  or  in  part,  but  without  prejudice  to  any  portion  thereof 
unpaid,  and  to  incur  and  pay  on  behalf  of  the  said  Tucson  Cattle  Com- 
pany all  reasonable  expenses  incident  to  the  collection  of  said  claim, 
and  generally  to  do  all  such  other  things  in  connection  therewith  as  may 
be  necessary  and  proper  in  the  premises. 

In  Witness  Whereof,  the  said  Tucson  Cattle  Company  has 
caused  its  corporate  name  to  be  signed  hereunto  by  its 
President,  and  its  corporate  seal  to  be  affixed  and  attested 
by  its  Secretary,  all  being  done  in  the  City  of  Tucson, 
Arizona,  on  the  25th  day  of  March,  1903. 
CORPORATE  )  THE  TUCSON  CATTLE  COMPANY, 

SEAL.     }  By  GEORGE  M.  PRICE, 

President. 
ATTEST  SEAL: 

WILSON  M.  BIRNEY, 

Secretary. 


Form  137. — Corporate  Power  of  Attorney.     To  Sell  Machinery. 


POWER  OF  ATTORNEY. 


Know  All  Men  By  These  Presents,  That  the  Washington  Machine 
Company,  a  corporation  duly  organized  under  the  laws  of  the  State  of 
New  York,  with  its  principal  office  and  place  of  business  at  170  Broad- 
way, New  York  City,  has  made,  constituted  and  appointed,  and  by  these 
presents  does  make,  constitute  and  appoint,  Joseph  R.  Lawson,  of  Phila- 
delphia, Pennsylvania,  its  true  and  lawful  attorney,  for  it  and  in  its 
name,  place  and  stead,  to  sell,  bargain  and  convey,  for  such  price  and 
on  such  terms  as  may  seem  to  him  advisable,  all  that  certain  machinery, 
tools,  apparatus  and  material  belonging  to  said  Company  and  now  in 


CORPORATE  POWERS  OF  ATTORNEY.  289 

the  factory  building  at  63  West  Union  Street,  Philadelphia,  Pa.,  and  the 
said  Washington  Machine  Company  does  hereby  fully  authorize  its  said 
attorney  to  execute,  in  its  name,  all  such  bills  of  sale  or  assignments 
therefor  as  may  be  necessary,  and  to  do  all  such  other  things  in  connec- 
tion with  the  sale  of  the  said  machinery,  tools,  apparatus  and  materials 
as  may  to  him  seem  necessary  and  proper. 

In  Testimony  Whereof,  the  said  Washington  Machine  Com- 
pany has  caused  its  corporate  signature  and  seal  to  be 
hereunto  affixed  by  its  President  and  Secretary,  duly 
authorized  thereto,  all  being  done  in  the  City  of  New 
York  on  this  the  i5th  day  of  September,  1903. 
(  CORPORATE  1  THE  WASHINGTON  MACHINE  COMPANY, 

(      SEAL,     j  By  JOHN  H.  WELLINGTON, 

President. 
WILLIS  S.  HOLLINSBROOK, 

Secretary. 


Form  138. — Corporate  Power  of  Attorney.     To  Make  Delivery 
of  Deed. 


POWER  OF  ATTORNEY. 


Know  All  Men  By  These  Presents,  That  the  Albany  Milling  Com- 
pany, a  corporation  organized  under  the  laws  of  the  State  of  New  York 
and  having  its  principal  office  and  place  of  business  in  Albany,  in  the 
same  State,  has  made,  constituted  and  appointed,  and  by  these  presents 
does  make,  constitute  and  appoint,  John  H.  Adams,  of  New  York  City, 
its  true  and  lawful  attorney,  for  it  and  in  its  name  and  stead,  to  deliver 
to  the  New  York  Realty  Company,  of  New  York  City,  a  certain  deed 
duly  executed  by  the  said  Albany  Milling  Company,  and  transferring  to 
the  said  New  York  Realty  Company  the  property  therein  described  at 
Nos.  1298  and  1300  West  Street,  New  York  City,  and  to  receive  payment 
for  the  property  transferred  by  said  deed,  and  the  said  John  H.  Adams 
is  hereby  fully  authorized  and  empowered,  for  and  on  behalf  of  this 
Company,  to  make  good  and  valid  delivery  of  the  said  deed  and  to 
receive 'from  the  said  New  York  Realty  Company  the  sum  of  Twenty- 
two  Thousand  Five  Hundred  Dollars  ($22,500)  in  cash,  payment  for  the 
property  thereby  transferred,  and  to  receipt  for  said  payment,  and  to  do 
all  such  other  things  as  may  be  necessary  and  proper  in  the  premises. 

In  Witness  Whereof,  the  President  of  the  said  Albany  Milling 
Company  has  hereunto  signed  its  corporate  name,  and  the 
Secretary  has  hereunto  affixed  the  duly  attested  seal  of 
the  said  corporation,  all  being  done  in  the  City  of  Albany, 
on  this  the  first  day  of  September,  1903. 

ALBANY  MILLING  COMPANY, 

5  CORPORATE  I  By  JOHN  T.  ANDERSON. 

(      SEAL.     )  President. 

ATTEST  SEAL: 

HENRY  PARKER, 

Secretary. 

19 


290  CORPORATE  MANAGEMENT. 

The  above  power  of  attorney  should  have  attached  a  certi- 
fied copy  of  the  resolution  by  which  it  was  authorized,  but 
would  not  require  any  special  acknowledgment  or  execution, 
as  it  merely  empowers  the  agent  to  deliver  a  fully  executed 
deed.  The  following  form  authorizing  the  sale  of  land  and 
the  execution  and  delivery  of  deeds  thereto  would  require  the 
same  for  execution  and  acknowledgment  as  a  deed,  and  without 
this  would  be  ineffective. 


Form  139. — Corporate  Power  of  Attorney.     To  Manage,  Sell 
and  Deed  Land. 


POWER  OF  ATTORNEY. 


Know  All  Men  By  These  Presents,  That  the  Berwell  Investment 
Company,  a  corporation  duly  organized  and  existing  under  and  by 
virtue  of  the  laws  of  the  State  of  New  York,  and  having  its  office  and 
principal  place  of  business  at  No.  30  Broad  Street,  in  the  City  of  New 
York,  has  made,  constituted  and  appointed,  and  by  these  presents  does 
make,  constitute  and  appoint,  Horace  M.  Maxwell,  of  Houston,  Texas, 
its  true  and  lawful  attorney,  for  it  and  in  its  name,  place  and  stead,  to 
bond,  grant,  bargain,  sell,  contract,  lease,  exchange,  give  options  on, 
sell  timber  from,  sell  or  lease  oil,  coal  or  other  mineral  rights  in  or  on 
or  handle  or  dispose  of  in  such  other  way  as  may  by  him  be  deemed 
advantageous  and  advisable,  and  for  such  consideration  and  on  such 
terms  as  he  may  approve,  and  in  whole  or  in  part,  that  certain  tract  or 
parcel  of  land,  owned  by  said  Berwell  Investment  Company,  in  Brazos 
County,  Texas,  consisting  of  the  east  half  of  the  league  of  land  known 
as  the  J.  J.  Oliver  League,  and  containing  Two  Thousand  Two  Hundred 
and  Fourteen  (2,214)  Acres,  more  or  less,  said  land  being  part  of  the 
Headright  granted  to  J.  J.  Oliver  by  the  Mexican  Government  and 
surveyed  by  the  County  Surveyor  in  1836,  and  conveyed  to  the  Berwell 
Investment  Company  by  deed  from  the  said  J.  J.  Oliver,  dated  July  1st, 
1866,  and  recorded  in  the  office  of  the  County  Clerk  of  Brazos  County, 
D.  B.  15,  page  225;  and  the  said  Berwell  Investment  Company  grants 
to  its  said  attorney  full  power  and  authority  to  collect  and  receive  for 
said  Company  all  rents,  royalties  and  other  considerations  or  payments 
derived  from  the  said  property  in  any  way;  and  for  the  said  Berwell 
Investment  Company  and  in  its  name  and  stead,  either  alone  or  jointly 
with  others,  as  may  be  requisite  and  necessary,  to  make,  execute, 
acknowledge  and  deliver  good  and  sufficient  deeds,  conveyances,  option 
contracts  or  leases  for  the  said  property,  or  for  any  parts  thereof,  or  for 
any  rights  therein  or  thereon,  giving  and  granting  its  said  attorney  full 
power  and  authority  to  do  and  perform  any  and  every  act  and  thing 
whatsoever  requisite  and  necessary  to  be  done  in  the  premises,  the  said 


CORPORATE  POWERS  OF  -ATTORNEY.  291 

Company  hereby  ratifying  and  confirming  all  that  its  said  attorney  shall 
lawfully  do  or  cause  to  be  done  by  virtue  of  this  present  indenture. 

In  Witness  Whereof,  the  said  Berwell  Investment  Company 
has  hereunto  caused  its  corporate  name  to  be  signed  by 
its  President  and  its  corporate  seal  to  be  affixed  by  its 
Secretary,  all  being  done  in  the  City  of  New  York  on  this 
the  i8th  day  of  August,  1903. 

5  CORPORATE  I  THE  BERWELL  INVESTMENT  COMPANY, 

(      SEAL.      }  By  JAMES  WARREN, 

President. 
ATTEST  SEAL  : 

WILLIS  BAKER, 

Secretary. 


This  instrument  is  very  sweeping  in  the  powers  conveyed. 
Providing  for  the  conveyance  of  land  in  Texas,  it  would  have 
to  be  acknowledged  in  accordance  with  the  requirements  of 
the  Texas  law  for  the  acknowledgment  of  deeds. 

Form  140. — Corporate  Power  of  Attorney.     Appointing  Gen- 
eral Agent. 

POWER  OF  ATTORNEY. 


Know  All  Men  By  These  Presents,  That  the  Excelsior  Novelty  Com- 
pany, of  New  York  City,  does  hereby  make,  constitute  and  appoint  John 
H.  Sinton,  of  Cleveland,  Ohio,  its  true  and  lawful  attorney  to  represent 
it  in  the  States  of  Ohio,  Indiana  and  Illinois,  and,  for  it  and  in  its  name, 
place  and  stead,  to  conduct  and  manage  the  business  of  the  said  Com- 
pany in  the  States  aforesaid,  and  the  said  Excelsior  Novelty  Company 
does  hereby  grant  to  its  said  attorney  full  power  and  authority  to  so 
represent  it  in  the  said  States  of  Ohio,  Indiana  and  Illinois,  and  to  act 
for  it  and  carry  on  its  business  therein,  and  to  do  all  such  things  in  said 
States  in  connection  therewith  as  may  be  necessary  and  proper  in  the 
ordinary   course    of   the    Company's    business,    and   the    said    Excelsior 
Novelty    Company    does    hereby    ratify    and    confirm    all    that    its    said 
attorney  may  properly  do  by  virtue  of  the  authority  herein  conferred. 
In  Testimony  Whereof,  the  said  Excelsior  Novelty  Company 
has  caused  its  corporate  signature  and  seal  to  be  hereunto 
affixed  by  its  President  and  Secretary  in  the  City  of  New 
York  on  this  the  3ist  day  of  March,  1903. 
{  CORPORATE  }  EXCELSIOR  NOVELTY  COMPANY. 

I      SEAL.     3  By  JOHN  WELCH, 

President. 
HARVEY  JAMES, 
Secretary. 


292  CORPORATE  MANAGEMENT. 

Form  141. — Corporate  Power  of  Attorney.     Appointing  Agent 
for  Specific  Purposes. 


POWER  OF  ATTORNEY. 


Know  All  Men  By  These  Presents,  That  the  Adams  Reaping 
Machine  Company,  a  corporation  duly  organized  under  the  laws  of  the 
State  of  Delaware,  and  having  an  office  and  its  principal  place  of  busi- 
ness in  New  York  at  52  Broadway,  New  York  City,  has  made,  constituted 
and  appointed,  and  by  these  presents  does  make,  constitute  and  appoint, 
John  C.  Hartley,  of  Chicago,  Illinois,  its  true  and  lawful  attorney,  for 
it  and  in  its  name,  place  and  stead,  to  represent  said  Company  and  to  act 
as  the  General  Manager  of  its  business,  with  the  powers  enumerated 
below,  within  all  those  States  and  Territories  of  the  United  States  lying 
west  of  the  Mississippi  River. 

1.  To  lease  such  office  or  offices  and  to  purchase  such  furniture  and 
fittings  therefor  as  may  be  required  for  the  transaction  of  the  Com- 
pany's business. 

2.  To  employ  such  clerical  and  other  assistance  as  may  be  necessary 
in  the  conduct  of  the  Company's  business  and  to  pay  reasonable  salaries 
or  commissions  therefor. 

3.  To  receive,  collect  and,  as  may  be  necessary,  to  institute  suit  for 
the  collection  or  recovery  of  any  moneys  or  other  property  belonging 
to  the  Company. 

4.  To  deposit  in  the  Company's  name  and  in  such  suitable  bank  or 
banks  as  he  may  elect,  moneys  of  the  Company  coming  into  his  hands, 
and,  for  purposes  of  the  business,  to  draw  checks  against  the  same. 

5.  To  draw  and  accept  all  such  drafts  and  bills  of  exchange  and  give 
such  notes,  in  the  name  of  the  Company,  as  may  be  necessary  in  the 
ordinary  course  of  the  business  under  his  management. 

6.  To  endorse  for  deposit  or  collection  all  such  notes,  checks,  drafts 
and  bills  of  exchange  as  may  properly  come  into  his  hands  in  the  course 
of  the  Company's  business. 

7.  To  enter  into  such  contracts  and  undertakings  on  behalf  of  the 
Company,  and  to  do  all  such  other  lawful  acts  within  the  scope  of  the 
duties  of  General  Manager  as  may  be  requisite  or  desirable  in  the  con- 
duct of  the  Company's  business. 

In  Witness  Whereof,  and  in  pursuance  of  a  resolution  passed 
by  the  Board  of  Directors  at  a  regular  meeting  held  on 
the  I2th  day  of  May,  1003,  the  President  of  said  corpora- 
tion has  signed  its  corporate  name  to  these  presents,  and 
its  Secretary  has  hereunto  affixed  and  attested  the  corpo- 
rate seal,  all  upon  this,  the  I3th  day  of  May,  1003. 
|  CORPORATE  )  ADAMS  REAPING  MACHINE  COMPANY, 

r(      SEAL.      |  By  HARVEY  ADAMS, 

President 
ATTEST  SEAL  : 

HENRY  C.  SMITH, 

Secretary. 


CHAPTER    XLI. 
SUNDRY  CORPORATE  INSTRUMENTS. 


The  forms  of  the  present  chapter  are  not  distinctively 
corporation  forms,  but  are  the  important  forms  of  everyday, 
ordinary  business.  They  are,  however,  so  constantly  employed 
in  the  transactions  of  corporate  business  that  they  are  given 
here  to  show  the  adaptation  of  the  regular  forms  to  corporate 
uses.  The  examples  given  are  not  intended  to  be  in  any  way 
exhaustive,  but  merely  to  present  a  few  of  the  more  important 
forms  to  serve  as  precedents  and  to  aid  in  the  adaptation  of 
the  many  other  common  forms. 

Where  these  forms,  from  custom  or  because  of  statutory 
regulation,  vary  in  the  different  states,  the  New  York  form 
has  been  generally  followed.  With  but  few  exceptions,  how- 
ever, the  corporate  features  of  these  forms  are  the  same  in  the 
other  states  and  may  be  readily  adapted  to  the  general  form 
employed  in  the  particular  state  where  they  are  to  be  employed. 

Form  142. — Bill  of  Sale. 

BILL  OF  SALE. 

Know  All  Men  By  These  Presents,  That  the  Washington  Machine 
Company,  a  corporation  duly  organized  under  the  laws  of  the  State  of 
New  York,  with  its  principal  office  and  place  of  business  at  170  Broad- 
way, in  the  City  of  New  York,  in  consideration  of  the  sum  of  One 
Thousand  Dollars  ($1,000)  to  it  paid  by  the  John  C.  Harris  Company, 
of  Philadelphia,  the  receipt  whereof  is  hereby  acknowledged,  does 
hereby  sell,  transfer  and  assign  to  the  said  John  C.  Harris  Company 
the  following  goods  and  chattels,  viz.: 

All  of  the  machinery,  tools  and  apparatus  mentioned  and  specified  in 
the  annexed  schedule  and  now  in  the  factory  building  at  63  West  Union 
Street,  Philadelphia; 

To  have  and  to  hold,  all  and  singular,  the  said  goods  and  chattels  to 
the  said  John  C.  Harris  Company,  its  successors  and  assigns,  to  their 
own  use  and  behoof  forever; 

-293 


394  CORPORATE  MANAGEMENT. 

And  the  said  Washington  Machine  Company  does  hereby  covenant 
with  the  said  grantee  that  the  said  Washington  Machine  Company  is 
the  lawful  owner  of  said  goods  and  chattels;  that  they  are  free  from  all 
liens ;  that  it  has  good  right  to  sell  the  same  as  aforesaid ;  and  that  it 
will  warrant  and  defend  the  same  against  the  lawful  claims  and  demands 
of  all  persons. 

In  Witness  Whereof,  the  said  Washington  Machine  Company 
has  caused  its  corporate  name  to  be  signed  hereunto  by 
its  President,  and  its  corporate  seal  to  be  affixed  and  duly 
attested  by  its  Secretary,  said  corporate  seal  being  affixed 
both  to  these  presents  and  to  the  schedule  hereunto 
annexed,  all  being  done  in  the  City  of  New  York  on  this 
I3th  day  of  October,  1903. 

(  CORPORATE  )  THE  WASHINGTON  MACHINE  COMPANY, 

(      SEAL.     |  By  JOHN  H.  WELLINGTON, 

President. 
ATTEST  SEAL  : 

WILLIS  S.  HOLLINSBROOK, 

Secretary. 


The  inventory  or  schedule  of  the  goods  conveyed  by  this 
bill  of  sale  should  be  attached  to  it,  and,  in  accordance  with 
the  provisions  of  the  conveyance,  be  identified  by  the  duly 
attested  seal  of  the  Company. 

This  bill  of  sale  might  with  entire  propriety  have  been 
executed  by  the  agent  of  the  transferring  company  under  his 
power  of  attorney.  (See  Form  137.)  In  the  present  instance, 
however,  the  instrument  is  executed  by  the  company  and 
merely  sent  to  its  local  agent,  in  Philadelphia,  for  delivery. 

Form  143. — Assignment  of  Patent.     Individual  to  Corporation. 

ASSIGNMENT  OF  PATENT. 

Whereas,  I,  Alan  Hudson,  of  Newburgh,  County  of  Orange,  State  of 
New  York,  did  obtain  letters  patent  of  the  United  States  for  an  improve- 
ment in  Car  Couplings,  which  letters  patent  are  numbered  605,948,  and 
bear  date  the  6th  day  of  November,  in  the  year  1901;  and,  whereas,  I 
am  now  the  sole  owner  of  said  patent  and  of  all  rights  under  the  same; 
and,  whereas,  the  Montauk  Car  Coupler  Company,  a  corporation  duly 
organized  under  the  laws  of  the  State  of  New  Jersey,  and  having  its 
principal  office  and  place  of  business  at  No.  15  Exchange  Place,  Jersey 
City,  New  Jersey,  is  desirous  of  acquiring  the  entire  interest  in  the  same — 
together  with  all  claims  for  profits  and  damages  arising  from  past 
infringements  thereof,  and  the  right  to  sue  for  and  recover  in  its  own 
name  all  claims  for  such  infringements: 

Now,  Therefore,  to  all  whom  it  may  concern,  be  it  known,  that  for 
and  in  consideration  of  the  issue  to  my  order  by  the  said  .Montauk  Car 
Coupler  Company  of  its  entire  capital  stock,  excepting  ten  (10)  shares, 


SUNDRY  CORPORATE  INSTRUMENTS.  295 

heretofore  issued  to  the  incorporators  of  said  Company,  the  receipt  of 
which  aforesaid  stock,  amounting  to  Ninety-nine  Thousand  Dollars 
($99,000),  is  hereby  acknowledged,  I,  the  said  Alan  Hudson,  have  sold, 
assigned  and  transferred,  and  by  these  presents  do  sell,  assign  and  trans- 
fer, unto  the  said  Montauk  Car  Coupler  Company,  the  whole  right,  title 
and  interest  in  and  to  the  said  improvement  in  car  couplings  and  in  and 
to  the  letters  patent  therefor  aforesaid;  and  the  inventions  covered 
thereby,  together  with  all  claims  for  profits  and  damages  arising  from 
past  infringements  of  the  said  letters  patent,  and  the  right  to  sue  and 
recover,  in  its  own  name,  all  claims  for  such  infringements,  the  same  to 
be  held  and  enjoyed  by  the  said  Montauk  Car  Coupler  Company  for  its 
own  use  and. behoof,  and  for  the  uses  and  behoof  of  its  legal  representa- 
tives, successors  and  assigns,  to  the  full  end  of  the  term  for  which  said 
letters  patent  are  or  may  be  granted,  as  fully  and  entirely  as  the  same 
would  have  been  held  and  enjoyed  by  me  had  this  assignment  and  sale 
not  been  made. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and 
affixed  my  seal  at  Newburgh,  County  of  Orange,  State  of 
New  York,  this  i8th  day  of  March,  1903. 

ALAN  HUDSON,      [L.  s.] 
In  presence  of 

JACOB  ELLIS, 
HENDRICK  N.  ENSLOW. 

An  assignment  of  patent  does  not  require  notarial  acknowl- 
edgment under  the  Patent  Office  rules,  but  as  an  acknowledg- 
ment is  prima  facie  evidence  of  the  execution  of  the  instrument, 
it  is,  as  a  matter  of  convenience  and  safety,  usually  affixed.  The 
form  given  above,  as  well  as  Form  144,  follows  generally  the 
Patent  Office  "  Rules  of  Practice,"  though  some  slight  modifi- 
cations were  necessary  in  order  to  conform  to  the  requirements 
of  the  best  practice. 

Form  144. — Assignment  of  Patent.      Corporation  to  Corpora- 
tion. 


ASSIGNMENT  OF  PATENT. 

Whereas,  One  Alan  Hudson  did  obtain  letters  patent  of  the  United 
States  for  an  improvement  in  Car  Couplings,  which  letters  patent  are 
numbered  605,948,  and  bear  date  the  6th  day  of  November,  1901;  and, 
whereas,  the  Montauk  Car  Coupler  Company,  a  corporation  organized 
under  the  laws  of  the  State  of  New  Jersey,  did  by  purchase,  witnessed 
by  duly  executed  assignment  from  the  said  Alan  Hudson  to  the  said 
Montauk  Car  Coupler  Company,  under  date  of  March  18,  1903,  acquire 
the  said  patent  and  all  rights  under  the  same,  and  is  now  the  sole  owner 
thereof;  and,  whereas,  the  Harrison  Car  Building  Company,  a  corpora- 
tion organized  under  the  laws  of  the  State  of  New  York  and  having  its 
office  and  principal  place  of  business  at  1825  West  Broadway,  jn  the  City 
of  New  York,  is  desirous  of  acquiring  the  entire  interest  in  the  said 
patent: 


296  CORPORATE   MANAGEMENT. 

Now,  Therefore,  to  all  whom  it  may  concern,  be  it  known,  that  for 
and  in  consideration  of  the  sum  of  Ten  Thousand  Dollars  ($10,000)  paid 
to  the  said  Montauk  Car  Coupler  Company  by  the  said  Harrison  Car 
Building  Company,  and  in  further  consideration  of  four  promissory 
notes  for  Ten  Thousand  Dollars  ($10,000)  each,  drawn  in  favor  of  the 
said  Montauk  Car  Coupler  Company  by  the  said  Harrison  Car  Building 
Company,  all  of  said  notes  being  of  even  date  herewith,  and  payable, 
respectively,  at  three  (3)  months,  six  (6)  months,  nine  (9)  months  and 
twelve  (12)  months  from  date  thereof,  without  interest,  the  receipt  of 
said  payment  and  of  all  the  said  notes  being  hereby  acknowledged  by  the 
Montauk  Car  Coupler  Company,  the  said  Montauk  Car  Coupler  Com- 
pany has  sold,  assigned  and  transferred  and  by  these  presents  does  sell, 
assign  and  transfer  unto  the  said  Harrison  Car  Building  Company,  the 
whole  right,  title  and  interest  in  and  to  the  said  improvement  in  car 
couplings  and  in  and  to  the  letters  patent  therefor  aforesaid;  the  same 
to  be  held  and  enjoyed  by  the  said  Harrison  Car  Building  Company  for 
its  own  use  and  behoof,  and  for  the  use  and  behoof  of  its  legal  repre- 
sentatives, successors  and  assigns,  to  the  full  end  of  the  term  for  which 
said  letters  patent  are  or  may  be  granted,  as  fully  and  entirely  as  the 
same  would  have  been  held  and  enjoyed  by  the  said  Montauk  Car 
Coupler  Company  had  this  assignment  and  sale  not  been  made. 

In  Testimony  Whereof,  the  said  Montauk  Car  Coupler  Com- 
pany has  hereunto  caused  its  corporate  name  to  be  signed 
by  its  President  and  its  corporate  seal  to  be  affixed  and 
attested  by  its  Secretary,  all  being  done  in  Jersey  City, 
New  Jersey,  on  this  the  I5th  day  of  April,  1903. 
CORPORATE  1  MONTAUK  CAR  COUPLER  COMPANY, 

SEAL.        \  By  WlLLARD  HENDERSON, 

President. 
ATTEST  SEAL: 

ELLIS  CHANDLER, 

Secretary. 

Acknowledgment  of  this  instrument  is  not  absolutely  essen- 
tial, but  is  advisable.  (See  Form  123.) 

Form  145. — Assignment  of  Contract. 


ASSIGNMENT. 

Know  all  Men  By  These  Presents,  That  for  and  in  consideration  of 
the  issue  by  the  New  Jersey  Power  Company,  a  corporation  organized 
under  the  laws  of  the  State  of  New  Jersey  and  having  its  principal  office 
and  place  of  business  at  524  Broad  Street,  Newark,  New  Jersey,  of  Fifty 
Thousand  Dollars  ($50,000)  par  value  of  its  stock,  full-paid  and  non- 
assessable, to  the  Allen  Manufacturing  Company,  a  corporation  duly 
organized  under  the  laws  of  the  State  of  New  York,  and  having  its  place 
of  business  at  152  Greenwich  Street,  New  York  City,  the  receipt  of  which 
stock  is.  by  the  last-named  Company  hereby  acknowledged,  said  Allen 
Manufacturing  Company  does  hereby  assign,  transfer  and  convey  to  the 
said  New  Jersey  Power  Company,  all  and  singular,  its  right,  title  and 
interest  of  every  kind  in  and  to  a  certain  contract,  copy  of  which  is  herd- 
unto  annexed  and  made  part  of  this  present  instrument,  entered  into  on 
the  2ist  day  of  May,  1902.  between  John  H.  Carroll,  of  Albany,  New 
York,  and  the  said  Allen  Manufacturing  Company,  and  vesting  in  the 


SUNDRY   CORPORATE  INSTRUMENTS.  297 

said  last-named  Company,  its  successors  and  assigns,  under  the  condi- 
tions set  forth  in  said  contract,  the  exclusive  right  to  handle,  purchase 
and  acquire  all  the  inventions  and  patents  of  the  said  Carroll  for  the 
application  and  utilization  of  steam  power;  said  contract  being  conveyed 
to  and  accepted  by  the  said  New  Jersey  Power  Company  with  all  its 
rights,  privileges  and  obligations,  as  therein  set  forth  and  as  heretofore 
held  by  the  said  Allen  Manufacturing  Company. 

In  Witness  Whereof,  the  said  Allen  Manufacturing  Company 
has  hereunto  caused  its  corporate  name  to  be  signed  by 
its  President,  and  its  duly  attested  corporate  seal  to  be 
affixed  by  its  Secretary,  all  being  done  in  the  City,  County 
and  State  of  New  York  on  this  the  I3th  day  of  April,  1903. 
(  CORPORATE  )  ALLEN  MANUFACTURING  COMPANY, 

(      SEAL,     j  By  CHARLES  ALLEN, 

President. 
ATTEST  SEAL  : 

MALCOLM  HARDWICKE, 

Secretary. 

Acknowledgment  is  not  essential  to  this  assignment,  but  is 
advisable.  (See  Form  122.) 

Form  146. — Assignment  of  Contract.     Endorsement  Form, 

For  and  in  consideration  of  One  Dollar  and  of  other  sufficient  con- 
siderations, the  receipt  of  all  which  is  hereby  acknowledged,  the  Sterling 
Power  Company  does  hereby  sell,  assign  and  convey  to  the  Jones-Brown 
Machine  Company,  of  Cohoes,  New  York,  the  within  contract,  with  all 
its  rights,  privileges,  obligations  and  undertakings,  as  therein  set  forth. 
In  Witness  Whereof,  the  signature  and  the  attested  seal  of  the 
said  Sterling  Power  Company  are  hereunto  affixed  by  its 
duly  authorized  officers. 

(  CORPORATE  1  STERLING  POWER  COMPANY, 

(      SEAL.     }  By  MILLIS  STERLING, 

President. 
ATTEST  SEAL: 

HENRY  WELLINGS, 

Secretary. 

The  foregoing  assignment  is  informal,  but  sufficient.  It 
is  endorsed  on  the  back  of  the  contract  to  be  assigned,  or  with 
the  word  "  within  "  changed  to  "  above  and  foregoing  "  is 
placed  on  the  last  page  of  the  contract,  and,  as  between  the  two 
companies  mentioned  therein,  would  place  the  assignee  fully 
in  the  position  theretofore  occupied  by  the  assignor.  It  should 
be  noted,  however,  that  the  assigning  company  is  not  relieved 
from  liability  under  the  contract  assigned  unless  expressry  so 
stated  and  agreed  to  by  the  other  party  to  that  contract. 


398  CORPORATE  MANAGEMENT 

Form  147. — Chattel  Mortgage.     New  York. 

CHATTEL  MORTGAGE. 

Know  All  Men  By  These  Presents,  That  Whereas  the  Gem  Printing 
Company,  a  corporation  organized  under  the  laws  of  the  State  of  New 
York,  is  indebted  unto  the  John  Rogers  Machinery  Company,  a  corpo- 
ration organized  under  the  laws  of  the  State  of  New  Jersey,  in  the  sum 
of  Two  Thousand  Dollars  ($2,000),  being  for  goods  sold  and  delivered 
unto  the  said  Gem  Printing  Company; 

Now,  For  securing  the  payment  of  the  said  debt  and  the  interest 
thereon  to  the  said  John  Rogers  Machinery  Company,  the  said  Gem 
Printing  Company  does  hereby  sell,  assign  and  transfer  to  the  said  John 
Rogers  Machinery  Company  all  the  goods,  chattels  and  property 
described  in  the  following  schedule,  namely: 

One  Miehle  Perfecting  Press,  No.  225; 
One  Miehle  High-Speed  Pony  Press,  No.  362; 
One  "  Century  "  Campbell  Press,  No.  1345. 

Said  property  now  being  and  remaining  in  the  possession  of  said  Gem 
Printing  Company,  at  its  Press  Rooms,  No.  635  Murray  Street,  New 
York  City. 

Provided  always,  and  this  mortgage  is  on  the  express  condition,  that 
if  the  said  Gem  Printing  Company  shall  pay  to  the  said  John  Rogers 
Machinery  Company,  the  sum  of  Two  Thousand  Dollars  ($2,000),  with 
interest  from  date  hereof,  at  the  rate  of  6%  per  annum,  on  or  before  the 
first  day  of  January,  1904,  which  said  sum  and  interest  the  said  Gem 
Printing  Company  hereby  covenants  to  pay,  then  this  transfer  is  to  be 
void  and  of  no  effect;  but  should  said  Gem  Printing  Company  not  pay 
said  sum,  with  interest  to  date  of  payment,  on  or  before  the  date  afore- 
said, then  the  said  Rogers  Machinery  Company  shall  have  full  power 
and  authority  to  enter  upon  the  premises  of  said  Gem  Printing  Com- 
pany, or  any  other  place  or  places  where  the  goods  and  chattels  afore- 
said may  be,  and  to  take  possession  of  said  property  and  to  sell  the 
same,  or  so  much  thereof  as  may  be  necessary  to  satisfy  the  said  debt 
and  the  interest  thereon  from  the  proceeds  thereof,  after  deducting  all 
expenses  of  such  sale  and  the  keeping  of  said  property;  and  any  such 
sale  shall  be  public  and  only  after  due  announcement  thereof  for  two 
weeks  previous  thereto  in  one  of  the  daily  papers  published  in  the  City 
of  New  York,  and  any  proceeds  in  excess  of  the  amount  of  said  debt 
and  interest  thereon,  and  of  the  expenses  of  said  sale  and  keeping  of 
said  property,  shall  belong  to  the  said  Gem  Printing  Company  and  be 
paid  over  to  it  without  delay.  If  from  any  cause  said  property  shall  fail 
to  satisfy  said  debt,  interest,  cost  and  charges,  the  said  Gem  Printing 
Company  hereby  covenants  and  agrees  to  pay  the  deficiency. 

In  Witness  Whereof,  the  Gem  Printing  Company  has  caused 
its  corporate  signature  to  be  signed  hereunto  by  its  Presi- 
dent, and  its  corporate  seal  to  be  affixed  and  duly  attested 
by  its  Secretary,  this  i8th  day  of  September,  1902. 
(  CORPORATE  )  GEM  PRINTING  COMPANY, 

\      SEAL.     )  By  WILSON  GORDON, 

President 
ATTEST  SEAL  : 

EARL  WALLIS, 

Secretary. 

Add  acknowledgment.     (See  Form  122.) 


SUNDRY  CORPORATE  INSTRUMENTS.  299 

Form  148. — Deed.     New  York. 

DEED. 

This  Indenture,  made  the  loth  day  of  February,  in  the  year  nineteen 
hundred  and  two,  between  the  Merrill-Barrett  Manufacturing  Company, 
a  corporation  organized  and  existing  under  the  laws  of  the  State  of 
New  York  and  having  its  principal  office  and  place  of  business  at  No.  27 
Murray  Street,  New  York  City,  of  the  first  part,  and  Jasper  H.  Welles, 
of  Albany,  State  of  New  York,  of  the  second  part: 

Witnesseth,  That  the  said  party  of  the  first  part,  in  consideration  of 
Ten  Thousand  Dollars  ($10,000),  lawful  money  of  the  United  States, 
paid  by  the  party  of  the  second  part,  does  hereby  grant  and  release  unto 
the  said  party  of  the  second  part,  his  heirs  and  assigns  forever,  all  that 
parcel  of  land 

(Here  insert  description.) 

Together  with  the  appurtenances  and  all  the  estate  and  rights  of  the 
party  of  the  first  part  in  and  to  said  premises. 

To  have  and  to  hold  the  above  granted  premises  unto  the  said  party 
of  the  second  part,  his  heirs  and  assigns  forever. 

And  the  said  party  of  the  first  part  does  covenant  with  said  party  of 
the  second  part  as  follows: 

First — That  the  party  of  the  first  part  is  seized  of  the  said  premises 
in  fee  simple  and  has  good  right  to  convey  the  same. 

Second — That  the  party  of  the  second  part  shall  quietly  enjoy  the  said 
premises. 

Third — That  the  said  premises  are  free  from  incumbrance. 
Fourth — That  the  party  of  the  first  part  will  execute  or  procure  any 
further  necessary  assurance  of  the  title  to  said  premises. 

Fifth — That  the  party  of  the  first  part  will  forever  warrant  the  title  to 
said  premises. 

In  Witness  Whereof,  the  said  party  of  the  first  part,  the  Mer- 
rill-Barrett Manufacturing  Company,  has  caused  its  corpo- 
rate seal  to  be  hereunto  affixed  and  attested  by  its  Secre- 
tary, and  these  presents  to  be  signed,  acknowledged  and 
delivered  in  its  name  and  behalf  by  its  President,  on  the 
day  and  year  first  above  written. 

CORPORATE  1  MERRILL-BARRETT  MANUFACTURING  COMPANY, 

SEAL.     )  By  MARLIN  S.  MERRILL, 

President. 
ATTEST  SEAL  : 

EDGAR  NELSON, 

Secretary. 


Add  acknowledgment.     (See  Form  122.) 


CHAPTER  XLTI. 
CORPORATE  BOOKS  AND  SUNDRY  FORMS. 


Form  149. — Transfer  Book. 


Ledger  Folio  25.  Transfer  No.  139. 

THE    HEMMINGWAY    PAPER    STOCK    COMPANY. 

For  value  received,  I  hereby  sell,  assign  and  transfer  to  William  S. 
Bassett,  of  Brooklyn,  New  York,  Twenty-five  (25)  Shares  of  the  Capital 
Stock  of  the  above-mentioned  Company  now  standing  in  my  name  on 
the  Company  books  and  represented  by  surrendered  Certificates,  Nos. 
78,  95,  104. 

Witness  my  hand  and  seal  this   I5th  day   of  April,   1903,   at 
Jersey  City,  New  Jersey. 

EDWARD  B.  HICKEY,      [L.  s.] 
By  LEMUEL  MARKHAM, 

Attorney. 

New  Certificates  Nos.  335,  336. 
Issued  to  William  S.  Bassett. 
Ledger  Folio  63. 


Almost  invariably  the  transfer  book  is  provided  with  a 
stub  upon  which  are  again  entered  the  data  relating  to  the 
transfer.  As  the  transfer  itself  is  in  no  case  torn  from  or 
taken  out  of  the  book,  this  stub  is  not  necessary,  merely  pro- 
vides extra  work  for  the  secretary  and  may  well  be  omitted. 
See  Sections  44  and  148  for  explanation  of  the  method  of 
using  the  transfer  book. 

The  signature  to  the  ordinary  assignment  of  stock  should 
always  be  witnessed,  and  the  signature  to  the  assignment  of 
the  transfer  book  is  sometimes  similarly  verified.  Inasmuch, 
however,  as  the  transfer  book  assignment  is  usually  signed  by 
the  secretary,  or  transfer  agent,  and,  if  otherwise,  is  signed 
in  his  presence,  and  almost  invariably  is  merely  supplementary 
to  the  ordinary  duly  witnessed  assignment  on  the  back  of  the 

300 


CORPORATE   BOOKS  AND   SUNDRY   FORMS.  301 

surrendered  certificate,  a  witness  to  the  signature  of  the  trans- 
fer book  is  generally  regarded  as  superfluous  and  is  omitted. 

The  number  of  the  transfer  and  the  name  of  the  company 
may  be  printed  in  at  the  time  the  transfer  book  is  prepared,  or 
may  be  left  blank  to  be  filled  in  with  the  pen  at  the  time  of 
transfer  or  prior  thereto.  The  secretary  or  transfer  agent 
usually  acts  as  attorney  for  the  person  selling  the  stock,  and 
fills  out  and  signs  the  transfer  as  shown  above.  The  data  re- 
lating to  the  issue  of  the  new  certificate  is  no  part  of  the  trans- 
fer proper,  being  merely  a  memorandum  for  the  convenience 
of  the  secretary  when  making  the  entry  of  the  transfer  in  his 
stock  book. 

The  transfer  book  is  not  required  by  the  New  York  statutes 
and  is  not  usually  kept  by  the  smaller  corporations  of  that 
state.  In  New  Jersey  the  transfer  book  is  specifically  required 
by  the  statutes  and  must  be  kept  by  every  corporation  doing 
business  in  the  state. 

Stock  Book  and  Stock  Ledger. 

The  stock  book  and  the  stock  ledger  are  practically  one  and 
the  same  book,  and  the  stock  ledger  is  usually  understood  to  be 
referred  to  when  the  term  "  stock  book  "  is  employed.  In 
practice  the  stock  ledger  under  its  own  name,  or  under  the  title 
"  Stock  Book  and  Stock  Ledger  Combined,"  is  so  arranged  as 
to  contain  all  matters  that  would  properly  be  entered  in  a  stock 
book  or  stock  ledger. 

In  New  Jersey,  the  statutes  merely  state  that  the  "  stock 
books  "  shall  contain  the  names  and  addresses  of  the  stock- 
holders and  the  number  of  shares  held  by  each.  In  New  York, 
the  statutes  are  much  more  specific  and  provide  that  a  stock 
book  shall  be  kept  in  which  the  following  data  must  appear : 

1.  Names  of  stockholders  arranged  alphabetically. 

2.  Residence  of  stockholders. 

3.  Number  of  shares  held  by  each. 

4.  Time  stock  was  acquired. 

5.  Amount  paid  thereon. 

6.  From  or  to  whom  transferred. 


802  CORPORATE   MANAGEMENT. 

The  New  York  law  is  peremptory  in  regard  to  the  keeping 
of  such  stock  book,  providing  heavy  penalties  for  failure  so  to 
do,  and  further  providing  that  no  transfer  of  stock  shall  be 
valid  as  against  the  corporation,  its  stockholders  and  creditors, 
for  any  purpose  except  to  render  the  transferee  subject  to  the 
usual  statutory  liability,  until  the  transfer  has  been  duly  en- 
tered in  the  stock  book. 

The  following  forms  of  combined  stock  book  and  stock 
ledger  comply  with  all  the  requirements  of  both  the  New  York 
and  the  New  Jersey  laws,  and  will  be  found  convenient  and 
effective. 


CORPORATE  BOOKS  AND  SUNDRY   FORMS. 


172 


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304  CORPORATE  MANAGEMENT. 

The  foregoing  form  represents  the  upper  portion  of  a  page 
of  the  combined  stock  book  and  stock  ledger.  The  form  as 
given  is  much  reduced  in  size  from  the  usual  page,  which  is 
about  seventeen  inches  lengthwise  of  the  page  and  eight  and 
one-half  inches  in  depth.  The  leaves  of  the  book  should  be 
indexed  and  the  accounts  arranged  in  alphabetical  order.  The 
name  and  address  of  the  party  with  whom  the  account  is  kept 
does  not  appear  at  the  head  of  the  page,  but  in  the  first  column 
on  the  left  hand  side,  such  number  of  lines  being  allotted  him 
as  will,  in  the  opinion  of  the  secretary,  accommodate  his  ac- 
count. If  not  likely  to  be  active,  five  lines  will  probably  be 
sufficient  and  four  or  five  accounts  may  be  entered  on  a  single 
page.  If  likely  to  be  active,  ten  or  fifteen  lines,  or  even  the 
whole  page,  may  be  allowed  for  the  one  account.  Where 
more  than  one  account  appears  on  a  page,  each  account  should 
be  separated  from  the  one  which  follows  it,  by  a  heavy  single 
or  double  line  ruled  entirely  across  the  page. 

All  purchases  or  sales  of  the  stock  by  a  stockholder  of 
record  are  entered  on  his  account  in  this  book,  one  line  across 
the  entire  page  being  devoted  to  each  transaction.  In  the 
second  column  is  entered  the  date,  and  in  the  third — if  a  pur- 
chase— the  name  of  the  stockholder  of  record  from  whom  the 
stock  is  received,  but,  if  a  sale,  the  name  of  the  party  to  whom 
the  certificate  is  issued.  If  stock  is  full-paid,  that  fact  is  noted 
in  the  fourth  column;  if  but  partly  paid,  the  amount  actually 
received  by  the  company  on  such  stock  would  appear  in  this 
column.  It  should  be  remembered  that  the  price  received  by 
the  party  selling  such  stock  does  not  affect  this  entry  in  any 
way,  only  its  condition  as  full-paid,  or  otherwise;  the  amount 
received  by  the  company  being  recorded  in  order  to  show  if 
there  is  any  further  liability  to  the  company,  or  its  creditors, 
on  the  stock  so  transferred. 

In  the  fifth  column,  the  numbers  of  the  certificates  issued  to 
the  party  when  he  acquires  stock  are  noted;  in  the  sixth 
column,  the  numbers  of  the  certificates  he  surrenders  when  he 


CORPORATE  BOOKS  AND  SUNDRY  FORMS.  305 

sells  or  transfers  stock.  If  he  should  sell  but  a  portion  of  the 
stock  represented  by  any  certificate,  the  number  of  the  new 
certificate  issued  to  him  for  the  balance  of  his  stock  unsold 
would  be  entered  in  the  fifth  column. 

In  the  seventh  column  is  entered  the  number  of  shares 
disposed  of,  and  in  the  eighth  column  the  number  of  shares 
acquired.  These  last  two  columns  constitute  the  stock  ledger 
proper,  and  the  amount  of  stock  at  any  time  belonging  to  the 
party  with  whom  the  account  is  left  may  be  found  by  taking 
the  difference  between  their  footings.  In  the  last  column  these 
differences,  or  balances,  may  be  entered  if  desired. 

In  the  event  of  the  party  purchasing  or  otherwise  acquiring 
stock,  and,  instead  of  having  it  issued  to  himself  in  a  single 
certificate,  having  it  issued  in  a  number  of  certificates,  as  is 
quite  frequently  the  case,  the  entry  would  vary  according  to 
the  conditions.  If  the  number  of  certificates  were  small,  the 
transaction  might  be  entered  on  a  single  line,  all  the  certificate 
numbers  being  entered  in  the  proper  space  in  the  fifth  column 
in  very  small  figures;  or  two  or  more  lines  might  be  devoted 
to  the  transaction  in  the  same  way.  Another  method  is  to 
devote  a  separate  line  to  each  certificate  taken  out  as  if  it  were 
a  separate  transaction.  Where  the  number  of  certificates  is  very 
large,  the  transaction  may  be  entered  on  one  line  and  the  cer- 
tificate numbers  noted  at  the  foot  of  the  account  with  a  refer- 
ence thereto  in  the  fifth  column  where  the  numbers  would 
otherwise  have  been  entered. 

The  same  conditions  obtain  where  a  number  of  certificates 
•are  surrendered  for  cancellation  on  a  single  sale  of  stock,  and 
the  arrangement  of  entry  would  be  similar. 


20 


306 


CORPORATE  MANAGEMENT. 


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CORPORATE  BOOKS  AND  SUNDRY   FORMS.  307 

The  preceding  stock  ledger  combines  in  compact  form  all 
the  requisites  of  the  stock  ledger  with  all  the  statutory  require- 
ments of  both  New  York  and  New  Jersey  as  to  the  stock  book. 

The  leaves  of  this  book  are  indexed  to  secure  the  necessary 
alphabetical  arrangement,  and  the  name  and  residence  of  the 
stockholder  appear  at  the  head  of  the  account  as  in  the  ordinary 
ledger.  On  the  right  hand  side  of  the  account  the  party  is 
credited  with  the  stock  he  purchases  or  otherwise  acquires, 
and  on  the  left  hand  side  is  debited  with  any  stock  disposed  of. 
The  difference  between  the  two  sides  shows  at  any  time  the 
amount  of  stock  standing  to  his  credit. 

On  the  debit  or  sales  side  of  the  account,  the  first  column 
gives  the  date  of  the  transaction,  the  second  the  name  of  the 
party  to  whom  the  stock  is  transferred,  the  third  the  number 
of  the  surrendered  certificate,  the  fourth  the  number  of  the 
certificate  reissued  to  the  transferrer,  in  case  but  a  portion  of 
the  stock  represented  by  the  surrendered  certificate  is  sold,  and 
the  fifth  column  the  number  of  shares  disposed  of. 

On  the  credit  side,  the  first  column  gives  the  date  of  pur- 
chase, the  second  the  name  of  the  party  assigning  the  pur- 
chased stock,  the  third  the  character  of  the  stock,  whether 
full-paid  or  but  part  paid,  and  if  but  part-paid  the  amount  paid 
to  the  company  thereon,  the  fourth  column  the  numbers  of 
the  certificates  issued  to  the  party,  and  the  last  the  number 
of  shares  acquired. 

Should  a  number  of  certificates  be  taken  out,  or  a  number 
be  surrendered,  the  entry  or  entries  would  be  arranged  as 
explained  under  the  Stock  Book  and  Stock  Ledger  Combined, 
Form  150. 

Form  152. — Secretary's  Oath. 


STATE  OF  NEW  JERSEY, 
County  of  Hudson, 

Charles  W.  Manning,  Secretary  of  the  Spencer-Hutchins  Company, 
being  by  me  duly  sworn,  deposes  and  says  that  he  will  faithfully  dis- 


308  CORPORATE   MANAGEMENT. 


charge  the  duties  of  Secretary  of  said  Company  to  the  best  of  his  skill 
and  ability. 

CHARLES  W.  MANNING, 
Subscribed  and  Sworn  to  before  me 
this  15th  day  of  January,  1903. 


I 


In  New  Jersey  the  secretary  must,  under  the  statutes,  be 
sworn  to  the  faithful  discharge  of  his  duties.  The  foregoing 
is  the  form  generally  used.  It  would  be  suitable  for  any  other 
state. 

Form  153. — Treasurer's  Bond. 

TREASURER'S  BOND. 

Know  All  Men  By  These  Presents,  That  we,  Charles  F.  Valois,  of 
Brooklyn,  New  York,  as  principal,  and  Erl  B.  Smith  and  Harry  Delany, 
both  also  of  Brooklyn,  New  York,  as  sureties,  are  held  and  firmly  bound 
unto  the  Hayward  Refining  Company,  a  corporation  duly  organized 
under  the  laws  of  the  State  of  New  York,  its  successors  and  assigns,  in 
the  sum  of  Ten  Thousand  dollars  ($10,000),  to  the  payment  of  which  to 
the  said  corporation,  its  successors  or  assigns,  we  do  by  these  presents, 
jointly  and  severally,  firmly  bind  ourselves,  our  heirs,  executors  and  adminis- 
trators. 

Signed  and  sealed  this  twenty-third  day  of  January,  1903. 

The  condition  of  the  above  obligation  is  that: 

Whereas,  The  said  Charles  F.  Valois  has  been  elected  Treasurer  of 
the  said  Hayward  Refining  Company  for  the  term  of  one  year  from  the 
2Oth  day  of  January,  1903;  and,  whereas,  the  said  Charles  F.  Valois  may 
hereafter  be  re-elected,  or  may  continue  to  act  as  such  officer  for  a 
longer  period  than  one  year; 

Now,  Therefore,  If  the  said  Charles  F.  Valois  shall  hereafter  in  all 
respects  fully  and  faithfully  perform  and  discharge  the  duties  of  said 
office  so  long  as  he  shall  occupy  the  same  or  continue  therein,  and  shall, 
when  properly  so  required,  fully  and  faithfully  account  to  the  said  corpo- 
ration, its  successors  or  assigns,  for  all  moneys,  goods  and  properties 
whatsoever,  for  or  with  which  the  said  Charles  F.  Valois  may  be  in  any 
wise  accountable  or  chargeable  to  the  said  corporation,  its  successors 
or  assigns,  and  if,  in  event  of  his  death,  resignation  or  removal  from 
office,  all  books,  papers,  vouchers,  money  and  other  property  of  what- 
ever kind  in  his  custody  belonging  to  the  said  corporation  shall  be  forth- 
with restored  to  the  said  corporation,  then  this  obligation  shall  be  void; 
otherwise  to  remain  in  full  force  and  virtue. 

CHARLES  F.  VALOIS.     [L.  s.] 
ERL  B.  SMITH,  [L.  s.] 

HARRY  DELANY.  [L.  s.] 

Signed,  sealed  and  delivered  ] 
in  the  presence  of  j 

HARVEY  JENNINGS. 
WILSON  H.  BROWN. 


CORPORATE  BOOKS  AND  SUNDRY  FORMS.  309 

The  foregoing  form  of  bond  for  treasurer,  with  sureties,  is 
general  and  suited  for  any  state.  It  should  be  acknowledged 
by  all  the  subscribing  parties.  In  corporations  where  the 
amounts  of  money  or  other  property  coming  into  the  treasurer's 
care  are  insignificant,  such  bond  is  not  usually  required. 
In  all  the  more  important  corporations,  and  wherever  large 
amounts  or  values  come  into  the  hands  of  the  treasurer,  a  bond 
is  given  as  a  matter  of  course.  The  bond  should  be  executed 
before  the  treasurer  is  installed  in  office,  and  would  properly 
be  held  in  custody  of  the  secretary  unless  otherwise  directed 
by  the  Board. 

Form  154. — Indemnity  Bond.     For  Reissued  Certificate. 

INDEMNITY  BOND. 

Know  All  Men  By  These  Presents,  That  we,  James  B.  Allen,  of 
Yonkers,  New  York,  as  principal  and  Walton  H.  Wernicke,  of  New 
York  City,  as  surety,  are  held  and  firmly  bound  unto  the  Montauk 
Dredging  Company,  a  corporation  duly  organized  under  the  laws  of  the 
State  of  New  York,  its  successors  and  assigns,  in  the  sum  of  Five 
Thousand  Dollars  ($5,000),  to  the  payment  of  which  to  the  said  corpo- 
ration, its  successors  and  assigns,  we  do,  by  these  presents,  jointly  and 
severally,  firmly  bind  ourselves,  our  heirs,  executors  and  administrators. 

Signed  and  sealed  this  twenty-third  day  of  April,  1903. 

The  condition  of  the  above  obligation  is  that: 

Whereas,  The  said  James  B.  Allen,  the  owner  of  record  of  twenty- 
five  (25)  shares  of  the  capital  stock  of  the  said  Montauk  Dredging  Com- 
pany, of  the  par  value  of  $100  each,  has  made  application  to  the  Board  of 
Directors  of  the  said  Company  for  the  issue  to  him  of  a  new  certificate 
for  the  said  twenty-five  shares  of  stock,  alleging  that  the  original  certifi- 
cate. No.  175,  issued  to  him  therefor  on  the  2ist  day  of  May,  1901,  is  lost, 
stolen  or  destroyed,  and  that  its  present  whereabouts  and  condition  are 
unknown  to  him;  and 

Whereas,  The  said  application  has  been  granted,  and  the  said  new  cer- 
tificate for  twenty-five  shares  of  the  stock  of  the  Montauk  Dredging 
Company,  pursuant  to  due  and  formal  resolution  of  the  said  Board  of 
Directors,  was  this  day  issued  to  the  said  James  B.  Allen; 

Now,  Therefore,  If  the  said  James  B.  Allen,  his  heirs,  executors  or 
administrators,  or  any  of  them,  do  and  shall,  from  time  to  time,  and  at 
all  times  hereafter,  save,  defend,  keep  harmless'  and  indemnify  the  said 
Montauk  Dredging  Company,  its  legal  successors  and  assigns,  of,  from 
and  against,  all  demands,  claims,  or  causes  of  action,  arising  from  or_on 
account  of  said  certificate  No.  175  for  twenty-five  shares  of  the  capital 
stock  of  the  said  Montauk  Dredging  Company,  and  of  and  from  all 
costs,  damages  and  expenses  that  shall  or  may  arise  therefrom,  and  shall 
also  deliver,  or  cause  to  be  delivered  up  to  the  said  Montauk  Dredging 
Company  the  said  missing  certificate  No.  175  for  cancellation,  whenever 


310  CORPORATE  MANAGEMENT. 

and  so  soon  as  the  same  shall  be  found,  then  this  obligation  shall  be 
void;  otherwise  to  remain  in  full  force  and  virtue. 

JAMES  B.  ALLEN.  [L.  s.] 

HENRY  F.  WERNICKE.     [L.  s.] 
Signed,  sealed  and  delivered  1 
in  the  presence  of  ] 

JOSEPH  HEINZELMAN. 
WILLIAM  G.  SINCLAIR. 


The  foregoing  indemnity  bond  would  be  suitable  for  any 
state.  It  is  used  where  a  stock  certificate  has  been  lost  or 
stolen,  and,  in  order  to  sell  the  stock,  or  to  use  it  as  collateral 
for  a  loan,  or  merely  to  have  the  matter  in  proper  shape,  the 
owner  of  the  missing  certificate  wishes  ,it  replaced  by  a  new 
certificate. 

The  possession  of  a  certificate  as  evidence  of  stock  owned 
would  not  be  necessary  to  enable  the  owner  to  draw  dividends 
or  to  appear  and  vote  such  stock  at  stockholders'  meetings. 
Such  rights  are  incident  to  the  ownership  of  the  stock  and  are 
not  affected  in  any  way  by  the  absence  or  loss  of  the  certificate. 
(See  §45-) 


CHAPTER  XLIIL 
THE  CORPORATE  CALENDAR. 


The  corporate  calendar  occupies  the  same  place  in  corporate 
affairs  that  the  note  or  collection  tickler  does  in  banking 
matters,  and  is  almost  as  essential  if  the  various  formalities 
of  corporate  procedure,  such  as  notices,  meetings,  reports,  etc., 
are  to  receive  due  and  proper  attention. 

The  calendar  consists  of  memoranda  covering  all  those 
important  formalities  connected  with  the  corporation  that  must 
be  attended  to  at  stated  times.  These  memoranda  are  so 
arranged  in  proper  chronological  order  that  the  secretary  may 
at  any  time,  by  a  mere  glance  at  his  calendar,  see  just  what 
corporate  duties  require  his  attention.  The  forms  which 
follow  give  the  general  arrangement  and  may  be  readily 
adapted  for  any  state. 

The  corporate  calendar  is  frequently  entered  in  the  minute 
book.  There  are,  however,  objections  to  this  plan,  as  it  neces- 
sitates frequent  references  to  the  minute  book,  and  this,  in 
practice,  the  secretary  is  liable  to  neglect.  The  better  plan  is 
to  have  the  calendar  entered  on  a  special  card,  or  on  a  desk 
calendar,  so  hung  or  placed  that  it  is  plainly  in  sight.  Or, 
if  the  minute  book  plan  is  preferred,  in  addition  thereto,  a 
small  card  or  "  tickler  "  may  be  prepared,  which,  kept  on  the 
desk,  will  call  attention  to  the  dates  upon  which  the  calendar 
in  the  minute  book  should  be  consulted. 

The  New  York  calendar  for  1903  which  follows  is  for  a 
corporation  having  its  principal  place  of  business  in  the  City 
of  New  York,  and  holding  its  annual  meeting  of  stockholders 
on  the  second  Tuesday  in  January,  at  3  P.  M..,  with  quarterly 

811 


312  CORPORATE  MANAGEMENT. 

meetings  of  directors  on  the  second  Wednesday  of  January, 
April,  July  and  October,  at  4  p.  M.  Its  by-laws  require  ten 
days'  notice  of  annual  meetings  and  five  days'  notice  of 
directors'  meetings.  The  stock  book  is  closed  twenty  days 
before  the  annual  meeting. 

It  will  be  noticed  that  under  this  arrangement  of  meetings 
the  January  directors'  meeting  will  usually  fall  on  the  day 
following  the  annual  meeting.  As  the  directors  for  the  ensu- 
ing year  are  elected  at  this  annual  meeting,  the  regular  five 
days'  notice  of  the  January  directors'  meeting  would  antedate 
the  election  of  directors.  Under  these  circumstances,  if  the 
election  were  duly  held,  the  notice  of  meeting  already  sent  out 
would  not  be  legal  notice  of  such  directors'  meeting,  nor,  unless 
the  old  board  were  re-elected,  would  it  even  reach  the  parties 
entitled  to  attend  the  meeting.  The  arrangement  of  meetings 
under  which  such  a  situation  could  occur,  though  common,  is 
awkward,  and  it  would  be  better  to  either  place  the  directors' 
meeting  later  in  the  month  or  hold  the  stockholders'  meeting 
earlier,  in  order  to  avoid  this  complication. 

The  secretary  would  meet  the  difficulty  by  sending  out  his 
regular  notices  of  the  January  directors'  meeting;  then,  if  the 
election  should  for  any  reason  fail,  such  meeting  would  be  held 
under  this  regular  notice.  If,  however,  the  election  were  held, 
the  regular  notice  would  be  vitiated  and  of  no  effect,  and  the 
secretary  would  disregard  this  notice  entirely  and  provide  for 
the  meeting  of  the  board  on  the  proper  date  by  means  of  a  call 
and  waiver  signed  by  all  the  newly  elected  members.  (See 
Forms  78,  79.) 

The  amount  of  detail  entered  on  the  corporate  calendar  will 
depend  entirely  upon  the  ideas  of  the  individual  secretary, 
ranging  from  a  mere  skeleton  outline  of  the  statutory  and 
by-law  reports  and  notices  required,  to  a  compendious  memo- 
randum of  corporate  procedure.  It  is  advantageous  to  enter 
reasonably  full  details,  as  to  do  so  may  save  much  subsequent 
research  and  trouble. 


THE  CORPORATE  CALENDAR.  313 

In  the  following  calendar  the  date  for  filing  of  reports, 
payment  of  taxes,  etc.,  is  entered  fifteen  days  in  advance  of  the 
last  day  allowed  by  law;  that  is,  a  report  that  may  be  deferred 
if  desired  until  the  3Oth  day  of  January,  is  entered  on  the 
calendar  under  date  of  January  I5th.  This  is  a  precaution 
that  may  be  varied  to  suit  the  individual.  A  safe  margin 
should,  however,  always  be  left,  and  the  fifteen  days'  margin 
of  the  present  calendar  is  not  excessive. 

If  for  any  reason  a  report  or  other  detail  of  the  corporate 
calendar  is  deferred  to  a  later  date  than  that  given,  a  special 
memorandum  of  the  deferred  detail  should  be  made  on  the 
calendar  itself — or  on  a  slip  attached  to  the  calendar — under 
the  proper  date  in  order  that  such  item  may  not  be  overlooked 
and  neglected  until  too  late. 

In  arranging  a  corporate  calendar  for  other  states,  the 
reports  to  be  made,  time  of  filing  same,  dates  for  payment  of 
taxes,  etc.,  will  be  taken  from  the  statutory  or  local  require- 
ments of  the  particular  state;  the  date  of  annual  meeting,  dates 
for  directors'  meetings,  times  for  closing  transfer  books,  etc. — 
unless  fixed  by  statute — from  the  by-laws  of  the  corporation. 

Form  155. — Corporate  Calendar.     New  York. 

CORPORATE  CALENDAR 

of  the 
HUDSON  RIVER  PACKING  COMPANY, 

of  New  York  City. 
1003. 
January. 

2nd.    Franchise  Tax  Payable.    Must  be  paid  before  January  isth. 
Based  upon  November  report.    Amount  of  tax  fixed  and 
statement  thereof  rendered  to  Company  by  State  Comp- 
troller.   Checks  should  be  made  payable  to  State  Treasurer. 
3rd.    Notify  Stockholders  of  Annual  Meeting  to  be  held  January 

13th. 

Qth.  Notify  Directors  of  Meeting  to  be  held  January  I4th.  If 
directors  are  elected  at  annual  meeting  this  notice  will  be 
vitiated  and  must  be  replaced  by  waiver  of  notice  signed, 
after  the  election,  by  all  the  newly  elected  directors.  (See 
preceding  comment  on  corporate  calendars.) 


314 


CORPORATE   MANAGEMENT. 


1903. 

January. 

I3th. 
I4th. 


15th. 


15th. 


February. 

March. 

15th. 


April. 

May. 
June. 
July. 


3rd. 
8th. 


3rd. 
8th. 


August. 

September. 
23rd. 


October. 

gth. 
I4th. 

November. 

I  St. 

I5th. 


Annual  Meeting  of  Stockholders  at  3  P.  M. 

Directors'  Meeting  at  4  p.  M.  If  election  of  directors  was 
held  at  annual  meeting,  have  waiver  of  notice  signed  by 
each  director. 

Annual  Report.  To  State  officials.  Must  be  filed  before  Janu- 
ary 3Oth.  Execute  in  duplicate  and  file  with  both  Secre- 
tary of  State  and  County  Clerk.  No  State  filing  fees. 
County  Clerk's  fee,  6c.  Blanks  not  supplied  by  officials. 
No  penalty  is  incurred  if  this  report  is  omitted  unless  such 
filing  is  requested  by  some  stockholder  or  creditor  of  the 
Company.  If  so  requested,  report  must  be  filed  within 
thirty  days  after  such  request  is  made. 

Notice  of  City  Assessment  sent  out  about  this  time.  If  not 
received,  enquiry  should  be  made  at  office  of  Commis- 
sioners of  Taxes  and  Assessments  to  ascertain  amount,  as 
the  Commissioners  are  under  no  obligation  to  send  out 
any  notice  thereof.  If  assessment  is  unsatisfactory,  appli- 
cation for  revision,  accompanied  with  a  statement  of  the 
actual  condition  of  the  Company,  as  of  the  second  Monday 
in  January,  must  be  sent  in  to  the  Commissioners  of  Taxes 
and  Assessments  not  later  than  March  3ist.  Blanks  for 
application  and  statement  furnished  by  Commissioners. 


Statement  and  Application  for  revision  of  unsatisfactory 
assessments,  if  not  already  filed,  should  be  sent  in  to  the 
Commissioners  of  Taxes  and  Assessments  without  delay. 
Will  not  be  received  after  March  3ist.  Blanks  furnished 
by  Commissioners.  No  fees. 

Notify  Directors  of  Meeting  to  be  held  April  8th. 
Directors'  Meeting  at  4  P.  M. 


Notify  Directors  of  Meeting  to  be  held  July  8th. 
Directors'  Meeting  at  4  P.  M. 


City  Taxes.  Get  statement  of  amount  from  Assessors' 
office.  If  paid  before  November  ist,  rebate  at  rate  of  6% 
per  annum  is  allowed  from  date  of  payment  to  December 
ist. 

Notify  Directors  of  Meeting  to  be  held  October  I4th. 
Directors'  Meeting  at  4  p.  M. 

Comptroller's  Report.  Must  be  sent  in  on  or  before  Novem- 
ber 1 5th.  Blanks  furnished  by  Comptroller.  No  fees. 

City  Taxes.  If  not  paid  before  December  ist,.  i%  is  added  to 
amount. 


THE  CORPORATE  CALENDAR.  316 

1903. 

December. 

I5th.     City  Taxes,  if  still  not  paid,  draw  interest  at  the  rate  of  ^% 

per  annum  from  the  first  Monday  in  October. 
22nd.    Close  Transfer  Books  for  annual  meeting  of  Jan.  I2th,  1904. 

The  following  New  Jersey  calendar  is  for  the  year  1903, 
for  a  corporation  holding  its  annual  meeting  of  stockholders 
on  the  first  Tuesday  in  January,  at  10  A.  MV  its  quarterly 
directors'  meetings  on  the  second  Tuesday  in  January,  April, 
July  and  October,  at  2  p.  M.,  with  ten  days'  notice  of  annual 
meeting  and  five  days'  notice  of  directors'  meetings;  paying 
regular  annual  dividends  on  the  first  Monday  in  February,  and 
closing  the  transfer  books  twenty  days  before  the  annual  meet- 
ing and  ten  days  before  the  dividend  day.  On  account  of  the 
very  diverse  times  and  methods  of  assessing,  correcting  errors 
and  paying  local  taxes  in  various  parts  of  the  state,  all  dates 
for  local  taxes  have  been  omitted.  Corporations  organized  in 
New  Jersey,  but  doing  business  outside  that  state,  will  not 
require  this  data.  New  Jersey  corporations  carrying  on  their 
business  in  the  state  must  be  governed  by  the  local  regulations 
and  make  the  proper  entries  for  local  taxation  in  accordance. 

The  closing  of  the  transfer  books,  the  preparation  of  the 
alphabetical  list  of  stockholders  and  the  notice  of  the  annual 
meeting,  preliminary  to  the  stockholders'  meeting  for  1903,  do 
not  appear  on  the  following  calendar,  as  all  these  matters  would 
have  been  already  attended  to  on  the  proper  dates  in  December, 
1902. 

Form  156. — Corporate  Calendar.     New  Jersey. 

CORPORATE  CALENDAR 

of  the 

SPRING  VALLEY   CHEMICAL   COMPANY 
of  New  Jersey. 


1903. 
January. 

6th.    Annual  Meeting  of  Stockholders  at  10  A.  M. 

8th.    Notify  Directors  of  Meeting  to  be  held  January  I3th. 


316 


CORPORATE  MANAGEMENT. 


1903. 

January. 

I3th.    Directors'  Meeting  at  2  p.  M. 

23rd.    Close  Transfer  Books  for  annual  dividend  day,  Feb.  2nd. 

February. 
2nd. 


2nd. 
I4th. 


March. 


April. 


May. 


June. 


9th. 
I4th. 

20th. 


5th. 


2nd. 


July. 


ist. 

9th. 

I4th. 


August. 
September. 

October. 

8th. 
I3th. 

November. 

December. 

i6th. 

26th. 


26th. 


Annual  Report  must  be  filed  with  Secretary  of  State  within 
thirty  days  of  annual  meeting.  Feb.  i4th  last  day.  Blanks 
furnished  by  Sec'y  of  State.  Filing  Fees  $1.00. 

Dividend  Day. 
Annual  Report,  if  not  already  filed,  must  go  in  to-day 


Notify  Directors  of  Meeting  to  be  held  April  I4th. 

Directors'  Meeting  at  2  p.  M. 

Report  to  State  Board  of  Assessors.  Made  as  basis  of  assess- 
ment of  franchise  tax.  Blanks  furnished  by  State  Board. 
Report  must  be  made  on  or  before  first  Tuesday  in  May. 
No  fees. 

Report  to  State  Board  of  Assessors.  Last  day  for  filing. 
(First  Tuesday  in  May.) 

Franchise  Tax  Assessed.  Must  be  paid  on  or  before  July  1st, 
otherwise  penalty  of  i%  per  month  is  added.  Appeal  for 
correction  of  any  errors  may  be  made  to  State  Board 
of  Assessors  any  time  within  three  months  from  date. 

Franchise  Tax:    Last  day  for  payment  without  penalty. 
Notify  Directors  of  Meeting  to  be  held  July  I4th 
Directors'  Meeting  at  2  p.  M. 


Notify  Directors  of  Meeting  to  be  held  October  I3th. 
Directors'  Meeting  at  2  p.  M. 


Close  Transfer  Books  preparatory  to  Annual  Meeting,  Jan- 
uary 5th,  1904. 

Prepare  Alphabetical  List  of  stockholders.  Must  be  kept  open 
for  inspection  of  stockholders  until  annual  meeting  and 
be  presented  at  that  meeting. 

Notify  Stockholders  of  Annual  Meeting  to  be  held  Jan- 
uary 5th,  1904. 


CHAPTER  XLIV. 
BOND    ISSUES. 


Under  the  New  York  statutes,  every  mortgage  by  a  corpo- 
ration must  be  authorized  by  the  consent  of  the  holders  of  not 
less  than  two-thirds  of  the  capital  stock  of  the  corporation. 
This  authorization  may  be  given  either  by  action  at  a  special 
meeting  called  for  that  purpose  upon  the  same  notice  as  that 
required  for  an  annual  meeting  (See  §  52  and  Form  88),  or 
by  a  written  consent  signed  by  the  holders  of  the  requisite 
amount  of  stock. 

The  form  of  resolution,  if  action  were  taken  at  a  meeting, 
would  be  as  follows : 

Form  157. — Stockholders'  Resolution  Authorizing  Mortgage. 


Resolved,  That  the  Board  of  Directors  and  proper  officers  of  the  Remsen 
Realty  Company  be  hereby  authorized  and  empowered  to  make  and  issue 
its  first  mortgage,  six  per  cent.,  thirty  year,  gold  bonds  to  the  amount  of 
three  hundred  thousand  dollars  ($300,000)  and  to  secure  the  due  payment 
of  the  principal  and  interest  thereof,  by  executing  and  delivering  to  a 
suitable  trustee  a  first  mortgage  or  deed  of  trust  upon  the  entire  property 
and  franchises  of  the  said  Remsen  Realty  Company. 


The  minutes  of  the  special  or  annual  meeting  at  which 
this  resolution  was  adopted  should  show  that  the  required  legal 
notice  of  the  meeting  had  been  given,  and  that  a  stock  vote 
of  not  less  than  two-thirds  of  the  outstanding  stock  was  cast 
thereat  in  favor  of  such  resolution. 

Unless  the  stockholders  of  a  company  are  very  numerous, 
it  is  simpler  to  secure  the  necessary  authorization  for  a  bond 
issue  by  a  written  consent,  as  shown  in  the  following  form : 

317 


818  CORPORATE  MANAGEMENT. 

Form  158. — Stockholders'  Written  Consent  to  Mortgage. 

CONSENT  TO  MORTGAGE. 


We,  the  undersigned,  stockholders  of  the  Remsen  Realty  Company,  a 
corporation  duly  organized  and  existing  under  the  laws  of  the  State  of 
New  York,  with  a  capital  stock  of  $500,000  divided  into  5,000  shares  of  the 
par  value  of  $100  each,  owning  and  holding  more  than  two-thirds  of  the  capi- 
tal stock  thereof,  do  hereby  consent  and  agree  that  the  Board  of  Directors  and 
proper  officers  of  the  said  company  may  make  and  issue  its  first  mortgage, 
six  per  cent.,  thirty  year,  gold  bonds  to  the  amount  of  three  hundred  thousand 
dollars  ($300,000),  and  may  secure  the  due  payment  of  the  principal  and 
interest  thereof  by  executing  and  delivering  to  a  suitable  trustee  a  first 
mortgage  or  deed  of  trust  upon  the  entire  property  and  franchises  of  the 
said  Remsen  Realty  Company. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  the 
number  of  shares  owned  by  us  respectively  in  the  said  Remsen 
Realty  Company,  this  first  day  of  March,  1904. 

FRANKLIN  MOFFAT,  3,000  shares. 
MANLY  T.  HEWLIT,  1,000  shares. 
JOHN  P.  GOLDMAN,       73  shares. 
STATE    OF    NEW     YORK,  I 
County  of  New  York,   j  ss~' 

On  this  2d  day  of  March,  1904,  before  me  personally  came  Franklin 
Moffat,  Manly  T.  Hewlit  and  John  P.  Goldman,  to  me  known  and  known 
to  me  to  be  the  persons  described  in  and  who  executed  the  foregoing  consent 
to  mortgage  and  severally  duly  acknowledged  to  me  that  they  had  made, 
signed  and  executed  the  same  for  the  uses  and  purposes  therein  set  forth. 

JOHN  WISE, 
Notary  Public  for  New  York  County. 


It  must  be  borne  in  mind  that  this  written  consent  to  mort- 
gage, unsupported  by  any  corporate  action,  is  at  variance  with 
the  general  rule  that  stockholders  can  only  act  in  duly  assem- 
bled meeting,  and  is  only  permissible  where  expressly  author- 
ized by  the  statute  law.  In  most  states  of  the  Union  such  a 
proceeding  would  be  absolutely  nugatory. 

Whether  the  consent  is  given  at  a  meeting  duly  called  for 
the  purpose  or  by  written  consent,  a  corporate  certificate  must 
be  prepared  as  in  the  form  following  and  filed  in  the  office  of 
the  Clerk  of  the  County  wherein  the  corporation  has  its  prin- 
cipal place  of  business.  This  certificate  is  drawn  on  the 
assumption  that  the  required  authorization  was  given  by  reso- 
lution. If  it  were  given  in  writing  the  reference  to  the  consent 
in  the  certificate  would  be  changed  to  correspond. 


BOND   ISSUES.  319 

Form  159. — Certificate  of  Consent  to  Mortgage. 


This  is  to  certify  that  the  holders  of  more  than  two-thirds  of  the  capital 
stock  of  the  Remsen  Realty  Company,  a  corporation  duly  organized  and 
existing  under  the  laws  of  the  State  of  New  York,  have,  pursuant  to  the 
provisions  of  Sec.  2,  of  the  Stock  Corporation  Law  of  New  York,  as  amended 
April  i7th,  1901,  given  their  consent  by  resolution  duly  adopted  at  a  special 
meeting  of  the  stockholders  called  for  that  purpose  in  accordance  with  the 
statute  requirements,  that  the  Board  of  Directors  and  proper  officers 
of  said  corporation  may  make  and  issue  its  first  mortgage,  thirty  year,  six 
per  cent.,  gold  bonds,  to  the  amount  of  three  hundred  thousand  dollars 
($300,000),  and  may  secure  the  due  payment  of  the  principal  and  interest 
thereof  by  executing  and  delivering  to  a  suitable  trustee  a  first  mortgage 
or  deed  of  trust  upon  the  entire  property  and  franchises  of  the  said  Remsen 
Realty  Company. 

In  Witness  Whereof,  the  said  Remsen  Realty  Company  has 
caused  this  certificate  to  be  subscribed  and  acknowledged  by 
its  President  and  Secretary  and  its  corporate  seal  to  be  here- 
unto affixed,  this  second  day  of  March,  in  the  year  one 
thousand  nine  hundred  and  four. 
J  CORPORATE  I  REMSEN  REALTY  COMPANY, 

(      SEAL,     j  By  FRANKLIN  MOFFAT, 

President. 
CHARLES  E.  WARREN, 

Secretary. 

STATE  OF  NEW  YORK,     I 
County  of  New  York,  j1" 

On  this  loth  day  of  March,  1904,  before  me  personally  came  Franklin 
Moffat  and  Charles  E.  Warren,  to  me  known,  who,  being  by  me  duly  severally 
sworn,  did  depose  and  say,  each  for  himself,  that  the  said  Franklin  Moffat 
resided  in  the  City  of  New  York  and  was  the  President  of  the  Remsen 
Realty  Company,  and  the  said  Charles  E.  Warren  resided  in  the  City  of 
Newark,  New  Jersey,  and  was  the  Secretary  of  the  Remsen  Realty  Company, 
the  corporation  described  in  and  which  executed  the  foregoing  instrument; 
that  they  each  knew  the  seal  of  the  said  corporation ;  that  the  seal  affixed  to 
the  said  instrument  was  such  corporate  seal  and  that  it  was  so  affixed  by 
order  of  the  Board  of  Directors  of  said  corporation  and  that  they  signed 
their  names  thereto  by  like  order  as  officers  of  the  said  corporation. 

FRANKLIN  MOFFAT. 

CHARLES  E.  WARREN. 
Sworn  to  before  me  this  loth   \ 
day  of  March,  1904.         j 

{NOTARIAL  {  JOHN  WISE, 

SEAL.     I        Notary  Public  for  New  York  County. 


Following  the  execution  and  filing  of  this  certificate  the 
directors  would  meet  and  pass  the  following  resolution,  reciting 
what  had  been  done  and  authorizing-  the  officers  to  proceed  in 
the  matter,  and  specifying  details  not  denned  in  the  general 
consent  given  by  the  stockholders. 


330  CORPORATE  MANAGEMENT. 

Form  1 60. — Directors'  Resolution  Authorizing  Bond  Issue. 


Whereas,  As  provided  by  Sec.  2,  of  the  Stock  Corporation  Law  of  the 
State  of  New  York,  as  amended  April  I7th,  1901,  the  holders  of  more  than 
two-thirds  of  the  capital  stock  of  the  Remsen  Realty  Company  have,  in 
accordance  with  the  requirements  of  the  statutes,  given  their  consent,  by 
resolution  duly  adopted  at  a  special  meeting  of  the  stockholders  called  for 
that  purpose,  that  the  Board  of  Directors  and  proper  officers  of  said  company 
may  make  and  issue  its  first  mortgage,  thirty  year,  six  per  cent.,  gold  bonds 
to  the  amount  of  Three  Hundred  Thousand  Dollars  ($300,000),  and  secure 
the  due  payment  of  the  principal  and  interest  thereof  by  executing  and 
delivering  to  a  suitable  trustee  a  first  mortgage  or  deed  of  trust  upon  the 
entire  property  and  franchises  of  the  said  Remsen  Realty  Company;  and 

Whereas,  The  President  and  Secretary  of  said  company  have  made  and 
filed  in  the  office  of  the  County  Clerk  of  New  York  County  their  certificate 
that  such  consent  was  legally  given; 

Now  Therefore  Be  It  Resolved,  That  in  pursuance  of  the  said  consent 
the  Board  of  Directors  of  the  Remsen  Realty  Company  hereby  authorizes, 
empowers  and  instructs  the  President  and  other  officers  of  the  said  company 
to  make  and  issue  six  hundred  (600)  of  its  first  mortgage,  thirty  year, 
gold  bonds  of  the  denomination  of  Five  Hundred  Dollars  ($500)  each,  all 
the  said  bonds  to  be  dated  the  second  day  of  May,  1904,  and  to  bear  interest 
at  the  rate  of  six  per  cent,  per  annum,  payable  semi-annually  on  the  first 
days  of  May  and  November  in  each  year,*  and  to  secure  the  due  payment  of 
the  principal  and  interest  of  said  bonds  said  officers  are  hereby  further 
authorized  and  instructed  to  execute  and  deliver  to  the  Metropolis  Trust 
Company  of  the  City  of  New  York,  as  Trustee,  a  first  mortgage  or  deed  of 
trust  upon  the  entire  plant,  property  and  franchises  of  the  Remsen  Realty 
Company. 


*  Here  may  be  inserted,  if  desired,  "And  said  bonds,  certificates  and  interest  coupons  shall 
be  in  substantially  the  forms  following."     (Full  forms  as  in  Deed  of  Trust.) 


In  New  Jersey  the  law  does  not  prescribe  any  specific  pro- 
cedure authorizing  mortgages.  Under  the  general  provisions 
of  the  statutes  the  directors  would  have  authority  to  mortgage 
the  property  of  the  corporation  without  authorization  by  or 
reference  to  the  stockholders.  The  practice  is,  however,  either 
to  expressly  authorize  the  directors,  by  charter  provision, 
to  mortgage  to  a  certain  amount,  or  to  call  a  special  meeting 
of  the  stockholders  for  the  purpose. 

In  other  states  the  statutes  would  have  to  be  consulted.  It 
would  seem  unnecessary  to  say  that  a  bond  issue  under  any 
circumstances  demands  the  services  of  an  experienced  and 
careful  lawyer. 


BOND  ISSUES.  321 

Form  161. — Deed  of  Trust,  Including  Forms  of  Bond  and 
Coupon. 

DEED  OF  TRUST. 


This  Indenture,  made  and  entered  into  this  I2th  day  of  April,  one 
thousand  nine  hundred  and  four,  by  and  between  the  Remsen  Realty  Com- 
pany, a  corporation  duly  organized  and  existing  under  the  laws  of  the  State 
of  New  York,  having  its  office  at  No.  170  Broadway,  New  York  City, 
hereinafter  called  the  Realty  Company,  party  of  the  first  part,  and  the 
Metropolis  Trust  Company  of  the  City  of  New  York,  a  corporation  duly 
organized  and  existing  under  the  laws  of  the  State  of  New  York,  having 
its  principal  office  at  Nos.  37  and  39  Wall  Street,  New  York  City,  as  Trustee, 
hereinafter  called  the  Trustee,  party  of  the  second  part,  Witnesseth : 

Whereas,  The  Board  of  Directors  of  the  said  Realty  Company  has,  by 
the  authority  and  with  the  consent  of  the  stockholders  thereof,  legally  given, 
duly  resolved  to  borrow  three  hundred  thousand  dollars  for  the  lawful 
business  purposes  of  the  said  Company,  and  for  that  purpose  to  execute 
and  issue  its  first  mortgage,  six  per  cent.,  thirty  year,  gold  bonds  of  the 
par  value  of  five  hundred  dollars  each,  dated  the  second  day  of  May,  1904,  and 
payable  on  the  ist  day  of  May,  1934,  in  gold  coin  of  the  United  States 
of,  or  equivalent  to,  the  present  standard  of  weight  and  fineness,  said  bonds 
to  bear  interest  at  the  rate  of  six  per  cent,  per  annum,  payable  in  like  gold 
coin,  semi-annually,  on  the  first  days  of  November  and  May  in  each  year, 
from  the  second  day  of  May,  1904,  until  the  payment  of  the  principal  amount 
thereof;  the  payment  of  the  principal  and  interest  of  said  bonds  to  be 
secured  by  a  mortgage  or  deed  of  trust  that  shall  be  a  first  mortgage  on 
the  entire  property  of  the  said  Realty  Company  as  hereinafter  described,  said 
deed  of  trust  to  be  in  substantially  the  form  of  this  indenture ;  and 

Whereas,  The  bonds  so  to  be  issued  are  to  be  in  substantially  the  form 
following,  viz. : 

UNITED  STATES  OF  AMERICA. 

STATE  OF  NEW  YORK. 

No $500.00 

REMSEN  REALTY  COMPANY, 

First  Mortgage,  Six  Per  Cent.,  Gold  Bonds. 

Know  All  Men  By  These  Presents,  That  the  Remsen  Realty  Company, 
a  corporation  organized  under  the  laws  of  the  State  of  New  York,  for  value 
received,  hereby  promises  to  pay  to  the  bearer  hereof,  or  if  this  bond  is 
registered,  to  the  registered  holder  thereof,  at  the  office  of  the  Metropolis 
Trust  Company  of  The  City  of  New  York,  on  the  first  day  of  May,  nine- 
teen hundred  and  thirty-four,  in  gold  com  of  the  United  States  of  America, 
of  the  present  standard  of  weight  and  fineness,  or  its  equivalent,  the  sum  of 
Five  Hundred  Dollars,  without  deduction  from  either  such  principal  or 
interest  for  or  on  account  of  any  United  States,  State,  municipal  or  other 
tax  or  taxes  which  the  Remsen  Realty  Company,  its  successors  or  assigns, 
may  be  required  to  pay  or  deduct  therefrom,  and  the  Remsen  Realty  Com- 
pany hereby  covenants  and  agrees  to  pay  all  such  tax  or  taxes,  and  in  the 
meantime  to  pay  interest  upon  the  said  sum  of  five  hundred  dollars  from 
and  after  the  second  day  of  May,  nineteen  hundred  and  four,  at  the  rate  of 
six  per  cent,  per  annum,  payable  in  like  gold  coin,  or  its  equivalent,  at  the 
same  place,  semi-annually,  on  the  first  days  of  November  and  May  in  each 

21 


otfz  CORPORATE   MANAGEMENT. 

year,  beginning  with  the  first  day  of  November,  1904,  on  presentation  and 
surrender  of  the  coupons  hereto  attached  as  each  of  them  becomes  due. 

This  bond  is  one  of  a  series  of  six  hundred  (600)  bonds  of  the  same 
tenor  and  date,  aggregating  three  hundred  thousand  dollars  ($300,000), 
numbered  consecutively  from  one  to  six  hundred,  both  inclusive,  for  the 
sum  of  five  hundred  dollars  ($500)  each,  all  of  which  bonds  are  secured 
equally  by  a  deed  of  trust,  which  is  a  first  mortgage  upon  the  properties  of 
the  Remsen  Realty  Company,  executed  and  delivered  by  the  said  Remsen 
Realty  Company  to  the  said  Metropolis  Trust  Company,  as  Trustee, 
granting  and  conveying  in  trust  and  mortgaging  as  security  for  the  payment 
of  the  principal  of  said  u:mds  at  maturity,  at  par,  and  the  interest  on  said 
bonds,  payable  semi-annually  at  the  rate  aforesaid,  all  the  real  estate  and 
other  property  of  the  said  Remsen  Realty  Company  mentioned  and  described 
in  said  deed  of  trust,  with  full  power  to  use  and  sell  the  same  in  the  event 
of  default  in  payment  of  the  bonds  or  coupons,  or  any  of  them,  and  apply 
the  proceeds  to  the  payment  of  same  as  in  said  deed  of  trust  provided. 
This  bond  is  issued,  received  and  held  subject  to  all  and  singular  the  terms 
and  conditions  contained  in  the  deed  of  trust  aforesaid. 

This  bond  is  further  secured  by  a  sinking  fund,  which  shall  consist  of 
and  be  maintained  by  the  payment  to  the  said  Metropolis  Trust 
Company  by  the  Remsen  Realty  Company  on  the  first  day  of  May,  1909,  and 
on  each  succeeding  first  day  of  May  thereafter,  until  the  redemption  of  all 
the  bonds  issued  under  said  deed  of  trust,  of  twenty-five  dollars  for  each 
thousand  dollars  of  bonds  then  issued  and  outstanding,  such  moneys  so 
paid  to  be  used  in  the  purchase  of  outstanding  bonds  at  the  lowest  price  at 
which  they  may  be  had,  not  exceeding,  however,  one  hundred  and  ten  per 
centum  of  the  face  of  said  bonds  plus  accrued  interest,  and  if  bonds  cannot 
be  so  purchased,  such  moneys  shall  be  used  in  the  redemption  of  the  bonds 
outstanding,  as  hereinafter  provided. 

This  bond  shall  not  become  obligatory  until  the  certificate  endorsed 
hereon  shall  be  signed  by  the  Trustee,  and  when  so  authenticated  by  the 
signature  of  the  Trustee  the  title  to  said  bond  shall  pass  by  delivery,  unless 
said  bond  is  registered,  and,  if  registered,  the  title  thereto  shall  pass  only 
by  transfer  on  the  books  of  said  Trust  Company,  and  no  transfer  except 
upon  said  books  shall  be  valid  unless  the  last  transfer  shall  have  been  to 
bearer,  which  shall  restore  transferability  by  delivery. 

This  bond  is  redeemable,  at  the  option  of  the  Remsen  Realty  Company, 
on  any  interest  day  at  any  time  after  the  first  day  of  May,  1909,  at  no  per 
cent,  of  its  face  value,  plus  accrued  interest,  provided  that  thirty  days'  notice 
of  such  redemption  shall  be  given  the  holder  thereof  by  notice  published 
once  a  week  for  four  consecutive  weeks  prior  to  such  redemption,  in  a 
newspaper  published  in  New  York  City. 

In  Witness  Whereof,  the  said  Remsen  Realty  Company  hath 
caused  these  presents  to  be  signed  by  its  President,  and  its 
corporate  seal,  duly  attested  by  its  Secretary,  to  be  hereunto 
affixed,  and  hath  hereunto  affixed  coupons  with  the  name 
of  its  Treasurer  engraved  thereon,  and  hath  caused  this  bond 
to  be  dated  the  second  day  of  May,  A.  D.  one  thousand  nine 
hundred  and  four. 

(  CORPORATE  )  RElttSEN   REALTY  COMPANY, 

{        SEAL.       j  By 

President. 
Attest : 

Secretary. 


BOND  ISSUES.  323 

[COUPON.] 
No *ISOO 

REMSEN  REALTY  COMPANY 

will  pay  to  the  bearer  at  the  office  of  the  Metropolis  Trust  Company  of 
the  City  of  New  York  the  sum  of  Fifteen  Dollars  ($15),  in  United  States 
Gold  Coin,  or  its  equivalent,  on  the  first  day  of  November,  1904,  being  six 
months'  interest  on  its  First  Mortgage,  Six  per  cent.,  Gold  Bond  No 


Treasurer. 


[TRUSTEE'S  CERTIFICATE.] 

The  Metropolis  Trust  Company  of  the  City  of  New  York  hereby 
certifies  that  the  within  Bond  is  one  of  a  series  of  Bonds  described  in  the 
Deed  of  Trust  therein  mentioned. 

METROPOLIS   TRUST   COMPANY  OF  THE 
CITY  OF  NEW  YORK, 

Trustee, 

By 

President. 

Now,  Therefore,  the  said  Realty  Company,  in  consideration  of  the  prem- 
ises and  of  the  sum  of  one  dollar  to  it  in  hand  paid  by  the  said  Trustee,  the 
receipt  whereof  is  hereby  acknowledged,  and  in  order  to  secure  the  due 
payment  of  the  principal  and  interest  of  the  bonds  to  be  issued  hereunder, 
and  to  insure  the  faithful  performance  of  the  covenants  and  agreements 
herein  contained,  hath  granted,  bargained,  sold,  aliened,  assigned,  conveyed, 
transferred  and  set  over,  and  by  these  presents  doth  grant,  bargain,  sell, 
alien,  assign,  convey,  transfer  and  set  over  unto  the  said  Trustee,  its  suc- 
cessors and  assigns ; 

All  of  the  following  described  property  and  franchises  of  the  Company, 
to  wit: 

(Specific  description  of  the  property  mortgaged.) 

To  Have  And  To  Hold  all  and  singular  the  said  property,  with  all  real 
estate,  buildings,  fixtures,  articles  and  property  of  every  kind,  belonging 
to  or  pertaining  unto  the  same  unto  the  said  Trustee,  its  successors  and 
assigns  forever. 

In  Trust,  Nevertheless,  for  the  equal  pro  rata  benefit  and  security  of  any 
and  all  persons  and  parties  who  may  be  or  become  the  owners  or  lawful 
holders  of  any  of  the  bonds  to  be  issued  hereunder  and  secured  hereby, 
irrespective  of  date  or  priority  of  issue,  without  any  discrimination,  prefer 
ence  or  priority  of  any  one  bond  over  another  or  others,  by  reason  of  priority 
in  time  of  issue,  or  sale,  or  negotiation  thereof,  or  otherwise,  and  to  secure 
the  due  payment  of  each  of  the  said  bonds  together  with  the  interest  thereof, 
and  for  the  uses  and  purposes  and  upon  the  terms  and  conditions  hereinafter 
declared  and  expressed ;  and 

It  is  Hereby  Expressly  Covenanted  And  Agreed  by  and  between  the 
parties  hereto  that  all  such  bonds  are  to  be  issued,  negotiated  and  received, 
and  that  the  said  property  and  franchises  mortgaged  are  to  be  held  by  the 
Trustee  upon  and  subject  to  the  following  further  trusts,  uses,  conditions 
and  covenants,  that  is  to  say: 

First. — The  bonds  to  be  issued  hereunder  shall  be  executed  on  behalf 
of  the  Realty  Company  by  its  proper  officers  and  shall  be  delivered  to  the 
Trustee  for  certification,  and  said  Trustee  shall  certify  and  deliver  said 
bonds  so  certified  upon  the  order  of  the  Board  of  Directors  of  the  Realty 


324  CORPORATE  MANAGEMENT. 

Company.  An  order  purporting  to  be  the  order  for  delivery  of  said  bonds 
and  believed  by  the  Trustee  to  be  genuine  shall  be  conclusive  authority  and 
full  protection  to  the  Trustee  for  the  certification  and  delivery  of  the  bonds. 

Only  such  bonds  as  shall  bear  thereon  endorsed  the  Trustee's  certificate, 
duly  executed,  shall  be  secured  by  this  indenture,  or  entitled  to  any  lien, 
right,  or  benefit  thereunder,  and  such  certificate  of  the  Trustee  upon  any 
such  bond  executed  by  the  Realty  Company  shall  be  conclusive  evidence 
that  the  bond  so  certified  has  been  duly  issued  thereunder,  and  that  the 
holder  is  entitled  to  the  benefit  of  the  trust  hereby  created. 

Before  certifying  or  delivering  any  bond,  all  coupons  thereon  then 
matured  shall  be  cut  off,  canceled  and  delivered  to  the  Realty  Company. 

Second. — All  bonds  secured  hereunder  may  be  registered  in  the  name  of 
the  holder,  when  so  requested  by  such  holder,  upon  bond  transfer  books 
which  the  Realty  Company  shall  maintain  and  keep  for  such  purpose  at 
the  office  of  the  Trustee  in  the  City  of  New  York  as  long  as  any  of  the  said 
bonds  shall  remain  outstanding.  After  such  registration  such  bonds  shall 
be  transferable  only  upon  such  transfer  books,  by  the  registered  owner  or 
his  lawful  attorney,  and  any  such  transfer  shall  be  noted  on  the  bonds  by 
the  indorsement  of  the  Transfer  Agent  hereinafter  appointed.  After  regis- 
tration of  any  bond,  the  principal  thereof  shall  be  payable  only  to  the 
registered  owner,  but  the  coupons  shall  be  payable  to  the  bearer  upon 
presentation  and  surrender  thereof,  and  shall  be  negotiable  by  delivery  as 
if  such  bond  was  not  registered. 

Any  registered  bond  may  at  any  time  be  transferred  by  the  registered 
owner  thereof,  upon  said  transfer  books  to  bearer,  and  such  transfer  shall 
be  noted  upon  said  bond,  and  the  said  bond  shall  thereupon  be  negotiable 
by  delivery  as  if  it  had  never  been  registered,  and  each  of  said  bonds  shall 
continue  subject  to  successive  registration  and  transfer  to  bearer  at  the 
option  of  the  holder  thereof.  , 

For  the  purpose  of  registering  and  transferring  said  bonds  as  above  set 
forth,  the  Metropolis  Trust  Company  of  the  City  of  New  York  is  hereby 
appointed  and  constituted  Transfer  Agent  of  the  said  Realty  Company. 

Third. — Until  default  shall  be  made  by  the  Realty  Company,  its  successors 
or  assigns,  in  the  payment  of  the  principal  or  interest  of  the  bonds  hereby 
secured,  or  any  of  them,  or  in  the  performance  of  any  of  the  covenants, 
agreements  and  provisions  on  its  part  to  be  kept  and  performed,  as  herein 
set  forth,  the  Realty  Company,  its  successors  and  assigns  shall  be  permitted 
to  possess,  manage,  use  and  occupy  the  premises  affected  hereby,  with  all 
their  appurtenances  and  belongings  in  all  respects  as  fully  as  if  this  indenture 
had  not  been  made. 

Fourth. — If  the  Realty  Company  shall  well  and  truly  pay  to  the  holders 
thereof  the  principal  of  the  bonds  secured  hereunder  and  the  interest  moneys 
becoming  due  thereon  respectively  at  the  time  and  in  the  manner  specified 
in  the  said  bonds  and  coupons  thereto  annexed,  and  shall  keep  and  perform 
all  the  covenants,  agreements  and  stipulations  on  its  part  in  said  bonds  or 
in  this  agreement  contained,  then  these  presents  and  the  trust  hereby  created 
shall  cease  and  determine,  and  the  said  Trustee  shall  in  such  event  release 
and  discharge  this  mortgage  and  the  property  and  premises  encumbered 
thereby.  The  Trustee  may  also  execute  such  release  and  discharge  upon 
production  by  the  Realty  Company  or  its  assigns  of  all  the  bonds  issued 
hereunder,  together  with  the  coupons  thereto  belonging,  canceled  or  for 
cancellation,  and  the  Trustee  shall  not  be  under  any  liability  or  obligation 
to  inquire  into  the  holding  of  said  bonds  by  the  Realty  Company  or  its 
assigns. 

Fifth — The  said  Realty  Company,  while  it  shall  be  in  possession  of  the 
mortgaged  premises,  and  while  there  shall  be  no  existing  default  in  respect 


BOND  ISSUES.  325 

of  the  payment  of  the  principal  or  interest  of  any  of  the  said  bonds  of  the 
Realty  Company,  or  in  the  performance  of  any  of  the  covenants  herein, 
may,  with  the  consent  in  writing  of  the  Trustee,  sell  any  portion  of  the 
premises  heretofore  granted.  If,  in  the  opinion  of  the  Board  of  Directors 
of  the  Realty  Company,  such  sale  or  change  shall  be  expedient,  said  opinion 
shall  be  expressed  in  a  resolution  of  the  said  Board,  and  the  Trustee  may 
upon  delivery  to  it  of  a  copy  of  the  resolution  of  the  Board  of  Directors  to 
that  effect  release  from  the  lien  and  operation  of  this  indenture  any  part 
of  the  premises  hereby  mortgaged,  provided  that  the  purchase  money  from 
such  sale  or  sales  shall  be  paid  to  the  said  Trustee  for  application  to  the 
discharge  of  the  bonds  and  coupons  hereunder  issued,  as  set  forth  in 
Section  Fifteenth,  or  to  be  set  aside  to  be  applied  by  the  Realty  Company  in 
payment  for  other  real  or  personal  property  or  in  betterments  of  or  additions 
to  some  part  of  the  premises  mortgaged  hereby,  and  until  so  applied  shall  be 
held  by  the  Trustee.  Any  new  property  so  acquired  by  the  Realty  Company 
shall  ipso  facto  become  and  be  subject  to  the  lien  of  this  indenture  as  fully 
as  if  specifically  mortgaged  or  pledged  hereby,  but  if  requested  by  the  Trustee 
the  Realty  Company  shall  execute  special  instruments  of  incumbrance  upon 
such  properties. 

Sixth. — The  Realty  Company  covenants  and  agrees  that  it  shall  and  will 
promptly  pay  the  interest  and  the  principal  of  the  bonds  hereby  secured,  at 
the  time  and  in  the  manner  specified  in  said  bonds  and  the  coupons  thereto 
attached,  without  deduction  from  either  such  principal  or  interest  for  or  on 
account  of  any  United  States,  State,  municipal  or  other  tax  or  taxes  which 
the  Realty  Company,  its  successors  or  assigns,  may  be  required  to  pay  or 
deduct  therefrom,  and  the  Realty  Company  hereby  covenants  and  agrees  to 
pay  all  such  tax  or  taxes. 

The  Realty  Company  further  covenants  and  agrees  that  it  shall  and  will, 
from  time  to  time,  promptly  pay  and  discharge,  or  cause  to  be  paid  and 
discharged,  all  taxes,  rates,  levies  or  assessments  and  charges,  ordinary  and 
extraordinary,  levied  or  imposed  upon  the  premises  and  properties  mort- 
gaged to  the  Trustee  to  secure  the  payment  of  the  bonds  issued  hereunder, 
or  on  any  part  thereof,  the  lien  of  which  might  or  could  be  held  prior  or 
equal  to  the  lien  of  this  indenture,  so  that  the  same  shall  not  fall  into  arrears 
and  so  that  the  priority  of  this  indenture  given  to  secure  said  bonds  shall 
be  preserved. 

The  Realty  Company  further  covenants  and  agrees  that  it  will  not  create 
nor  suffer  any  mechanic's,  laborer's  or  other  similar  liens  to  be  created  upon 
the  premises  and  property  mortgaged  to  secure  the  bonds  issued  hereunder, 
whereby  the  lien  of  this  indenture  might  or  could  be  impaired,  until  the 
bonds  so  secured  hereunder,  with  all  the  interest  accrued  thereon,  shall  have 
been  fully  paid  and  satisfied. 

Seventh. — A  sinking  fund  shall  be  created  for  the  redemption  of  the 
bonds  issued  hereunder.  It  shall  consist  of  and  be  maintained  by  the 
payment  to  the  Trustee  by  the  Realty  Company  on  the  first  day  of  May, 
1909,  and  on  each  succeeding  first  day  of  May  thereafter  until  the  redemption 
of  all  the  bonds  issued  hereunder,  of  twenty-five  dollars  for  each  thousand 
dollars  of  bonds  then  issued  and  outstanding,  such  moneys  so  paid  to  be 
used  in  the  purchase  of  outstanding  bonds  at  the  lowest  price  at  which  they 
may  be  had,  not  exceeding,  however,  one  hundred  and  ten  per  centum  of  the 
face  value  of  said  bonds,  plus  accrued  interest,  and  if  bonds  cannot  be  so 
purchased,  such  money  shall  be  used  in  redemption  of  bonds  outstanding 
as  provided  and  set  forth  in  Section  Fifteenth. 

Eighth. — The  Realty  Company  covenants  and  agrees  that  this  deed  of 
trust  delivered  to  the  Trustee  shall  be  a  first  mortgage  upon  the  premises 
and  property  affected  thereby,  that  the  same  shall  be  duly  executed  and 


326  CORPORATE  MANAGEMENT. 

recorded  in  the  proper  office  of  registry  in  the  County  of  New  York  where 
the  said  premises  are  situated,  and  that  the  Realty  Company  will  execute 
and  deliver  such  further  deeds,  transfers,  pledges  and  assurances  as  the 
Trustee,  under  the  advice  of  counsel  learned  in  the  law,  shall  reasonably 
require  for  the  better  accomplishing  of  the  purposes  and  provisions  of  this 
indenture. 

Ninth. — The  Realty  Company  covenants  and  agrees  that  all  buildings, 
structures  and  machinery  situated  upon  the  properties  affected  by  this  mort- 
gage given  to  secure  the  bonds  issued  hereunder,  shall  be  kept  insured  during 
the  entire  term  of  this  indenture  to  the  amount  of  insurance  on  such  proper- 
ties usually  allowed  by  insurance  companies,  against  loss  or  damage  by  fire, 
and  against  loss  or  damage  from  boiler  explosions,  and  that  the  said  Realty 
Company  shall  and  will  pay  all  premiums  upon  all  policies  for  such  insur- 
ance. All  such  policies  shall  be  made  payable  to  the  Trustee,  and  shall  be 
deposited  with  it  for  the  benefit  and  protection  of  the  bondholders  should 
any  loss  occur  from  fire  or  boiler  explosion  during  the  term  of  this  inden- 
ture. Any  payments  and  insurance  made  under  such  policies  may  be  applied 
directly  by  the  Trustee  to  the  repairing  or  replacement  of  the  property  dam- 
aged or  destroyed,  or  it  may  authorize  the  Realty  Company  to  contract  for 
such  repairs  or  replacements,  and  pay  part  or  all  of  the  cost  thereof  from 
said  insurance  moneys.  The  Trustee  may  in  its  discretion  employ  such  in- 
surance moneys  in  the  purchase  or  redemption  of  outstanding  bonds  as  set 
forth  in  Section  Fifteenth,  instead  of  expending  the  same  for  repairs  or 
replacement  of  property  damaged  or  destroyed. 

Tenth. — The  Realty  Company  covenants  and  agrees  that  it  shall  and  will 
at  all  times  keep  the  buildings,  structures  and  appurtenances  thereto,  or  any 
replacement  or  replacements  thereof  in  good  order  and  repair,  provided, 
however,  that  in  the  event  of  total  destruction  of  any  building,  the  Realty 
Company  may,  with  the  consent  of  the  Trustee,  add  to  the  insurance  moneys 
received  thereon  by  the  Trustee  sufficient  cash  payments  to  release  the  special 
property  upon  which  such  building  was  situated,  under  the  terms  set  forth 
in  Section  Fifth,  whereupon  the  Trustee  shall  release  the  said  property 
and  the  Realty  Company  may  dispose  of  the  same  at  its  discretion. 

Eleventh. — The  Realty  Company  covenants  and  agrees  that  when  and  as 
the  coupons  attached  to  the  bonds  issued  hereunder  are  paid,  the  coupons 
shall  be  canceled,  and  that  no  purchase  or  sale  of  the  said  coupons  or  advance 
or  loan  upon  the  same,  made  on  behalf  of,  or  at  the  request  of,  or  with  the 
privity  of  the  said  Realty  Company,  and  no  redemption  of  the  said  coupons, 
or  any  of  them,  by  any  guarantor  of  the  payment  of  the  same,  shall  be  taken 
or  operate  as  keeping  the  said  coupons  alive  or  in  force,  under  this  indenture 
as  against  the  holders  of  the  bonds  secured  hereunder  and  of  the  coupons 
annexed  thereto. 

.  Twelfth. — In  case  default  shall  be  made  in  the  payment  of  interest  on  any 
of  the  bonds  issued  hereunder,  and  such  default  shall  continue  for  a  period  of 
six  months  after  demand,  or  in  case  default  shall  be  made  in  the  performance 
of  any  other  covenant  or  condition  hereby  required  to  be  kept  or  performed 
by  the  Realty  Company,  and  if  the  same  shall  continue  for  a  period  of  six 
months  after  demand  made  for  such  performance,  the  Trustee  may,  and.  upon 
the  written  request  of  the  majority  in  amount  of  the  holders  of  the  bonds 
then  outstanding,  shall  by  written  notice  to  the  Realty  Company,  declare  the 
principal  of  all  the  bonds  hereby  secured,  then  outstanding,  to  be,  and  the 
same  shall  thereupon  become,  immediately  due  and  payable. 

Thirteenth. — In  case  default  shall  be  made  in  the  payments  of  the  princi- 
pal or  interest  of  any  of  the  said  bonds  when  the  same  is  due  and  payable 
according  to  the  tenor  thereof,  or  if  default  shall  be  made  in  the  performance 


BOND  ISSUES.  327 

of  any  other  covenant  or  condition,  hereby  required  to  be  kept  or  performed 
by  the  Realty  Company,  and  if  any  such  default  in  payment  or  performance 
shall  continue  for  a  period  of  six  months  after  demand  by  the  Trustee  then 
and  in  every  such  case  the  Trustee,  or  its  successors  in  the  Trust,  may  by  its 
attorneys  and  agents  enter  into  and  upon  all  and  singular  the  premises  hereby 
conveyed,  and  each  and  every  part  thereof  and  operate  and  conduct  the  busi- 
ness of  the  said  Realty  Company  in  all  respects  as  the  said  Realty  Company 
might  do  in  possession  of  the  same;  and  may  collect  and  receive  all  rents, 
income,  revenue  and  profit  to  be  derived  therefrom,  and  after  deducting  all 
proper  and  necessary  outlays  and  expenses  as  well  as  a  just  compensation 
for  its  own  services  and  for  the  services  of  such  attorneys,  agents  and  assist- 
ants as  it  may,  in  its  discretion,  employ  for  any  of  the  purposes  aforesaid, 
said  Trustee  shall  apply  the  rest  and  residue  of  the  moneys  received  by  it 
pro  rata  to  the  payment  of  the  interest  due  upon  such  of  said  bonds  as  shall 
then  be  outstanding.  In  any  such  case  if  payment  of  all  interest  and  any 
principal  due  shall  be  made  in  full  and  no  suit  to  foreclose  this  mortgage 
shall  have  been  begun  or  sale  made,  the  said  Trustee  shall  restore  the 
possession  of  the  premises  so  entered,  to  the  Realty  Company  without  preju- 
dice to  similar  entry  later  in  case  of  similar  default. 

Fourteenth. — In  case  default  shall  be  made  in  the  payment  of  the  principal 
or  interest  of  the  said  bonds,  when  the  same  is  due  and  payable  according  to 
the  tenor  thereof,  or  if  default  shall  be  made  in  the  performance  of  any  other 
covenant  or  condition  hereby  required  to  be  kept  or  performed  by  the  Realty 
Company,  and  if  any  such  default  in  payment  or  performance  shall  continue 
for  the  period  of  six  months  after  demand,  the  Trustee  may,  and  upon  written 
request  of  the  holders  of  a  majority  in  amount  of  the  registered  bonds  then 
outstanding,  being  first  indemnified  by  them  to  its  satisfaction,  shall  sell  or 
foreclose  upon,  according  to  the  proceedings  by  law  prescribed  in  this  state, 
all  or  any  portion  of  the  property  held  by  it  under  this  indenture,  and  such 
proceedings  of  sale  or  foreclosure  shall  be  a  perpetual  bar  both  at  law  and  in 
equity  against  the  Realty  Company  and  against  all  persons  claiming  by,  from 
or  under  it.  After  deducting  from  the  proceeds  of  such  sale  or  foreclosure, 
the  proper  allowance  for  all  expenses  thereof,  including  attorney's  and  counsel 
fees,  and  all  other  expenses  or  advances  which  may  have  been  made  or 
incurred  by  said  Trustee  in  respect  of  the  said  property  or  the  appurtenances 
thereto,  and  all  payments  which  may  have  been  made  by  it  for  taxes  or  assess- 
ments, or  in  satisfaction  of  charges  and  liens,  prior  to  the  lien  of  the  mort- 
gages and  deeds  of  trust  to  the  Trustee  thereon,  or  for  insurance,  as  well  as 
reasonable  compensation  for  its  own  services,  the  Trustee  shall  apply  the 
proceeds  to  the  payments  of  such  bonds  and  the  coupons  thereon  as  may  be  at 
the  time  unpaid,  without  giving  preference  or  priority  to  one  ^bond  over 
another,  but  ratably  to  the  aggregate  amount  of  such  unpaid  principal  and 
accrued  and  unpaid  interest,  and  if  any  surplus  remain  after  the  payment  in 
full  of  the  principal  and  interest  of  said  bonds,  then  the  Trustee  shall  transfer 
and  pay  over  such  surplus  to  the  Realty  Company. 

Fifteenth. — It  is  covenanted  and  agreed  between  the  parties  hereto  and 
any  future  holders  of  the  bonds  that  the  said  bonds  are  redeemable,  at  the 
option  of  the  party  of  the  first  part,  on  any  interest  day  after  the  first  day  of 
May,  1909,  at  one  hundred  and  ten  per  cent,  of  their  face  plus  accrued  inter- 
est, provided  that  thirty  days'  notice  of  such  redemption  shall  be  given  the 
holders  thereof,  by  notice  published  once  a  week  for  four  consecutive  weeks 
prior  to  such  redemption,  in  a  newspaper  published  in  New  York  City.  If 
said  bonds  are  registered,  then  a  copy  of  the  said  notices  shall  be  sent  to  the 
post  office  address  of  the  parties  in  whose  names  said  bonds  are  registered. 

Whenever  it  is  desired  to  redeem  any  of  said  bonds,  the  Board  of 
Directors  of  the  Realty  Company  shall  pass  a  resolution  setting  forth  the 
amount  of  bonds  (at  their  par  value)  desired  to  be  redeemed.  The  Presi- 


328  CORPORATE  MANAGEMENT. 

dent  of  the  Realty  Company  shall  thereupon  draw  by  lot  the  numbers  of  the 
bonds  to  be  redeemed,  and  he  shall  thereupon  certify  that  such  bonds  were 
drawn  for  redemption,  which  certificate  shall  be  entered  upon  the  minutes 
of  the  Realty  Company,  and  a  duplicate  copy  shall  be  delivered  to  the  Trus- 
tee. Said  bonds  having  been  so  drawn  for  redemption  shall  become  due  and 
payable  on  the  succeeding  interest  payment  date,  provided  that  the  date  of 
first  publication  and  the  date  of  mailing  notice  to  registered  holders  of  bonds 
shall  have  been  not  less  than  thirty  days  prior  to  such  interest  payment  date, 
and  the  said  bonds  shall  from  such  interest  payment  date,  cease  to  draw  inter- 
est, and  the  said  Realty  Company  may,  upon  the  deposit  of  the  proper  amount 
with  the  Trustee,  be  privileged  to  consider  said  bonds  as  paid  and  canceled. 

Sixteenth. — The  Trustee  may  resign  the  trust  hereby  created  upon  giving 
sixty  days'  notice  in  writing  to  the  Realty  Company.  In  case  of  the  resigna- 
tion of  the  Trustee,  or  of  its  dissolution  or  insolvency,  or  removal  for  cause 
as  Trustee  hereunder,  it  shall  be  the  duty  of  the  Realty  Company  to  call  a 
meeting  of  the  bondholders  by  printed  notice,  published  in  two  of  the  public 
newspapers  of  New  York  City,  once  a  week  for  three  consecutive  weeks  next 
preceding  such  meeting,  calling  such  meeting  to  be  held  in  the  said  City  of 
New  York,  and  by  mailing  notice  of  the  same  to  each  of  the  registered  bond- 
holders not  less  than  ten  days  before  the  date  of  such  meeting.  At  the  time 
and  place  specified  in  such  notice,  the  holders  of  said  bonds,  in  such  meeting 
assembled,  shall  organize  and  proceed  to  elect  a  suitable  corporation  to  act  as 
Trustee  under  this  agreement,  and  a  majority  in  amount  of  such  bonds 
legally  represented  at  such  meeting  shall  be  competent  to  elect  such  new 
Trustee,  and  the  corporation  so  elected  shall  immediately  upon  election  and 
on  its  acceptance  in  writing  of  such  trust  become  vested  with  all  the  estate, 
trusts,  rights,  powers  and  duties  of  the  present  Trustee  herein,  and  shall  be 
entitled  to  receive  from  the  present  Trustee  or  its  legal  representatives  all 
moneys,  mortgages  and  assurances  appertaining  or  relating  to  this  trust  and 
the  due  execution  thereof. 

Seventeenth. — It  is  covenanted  and  agreed  by  the  parties  hereto,  and  all 
the  holders  of  bonds  hereunder,  as  conditions  precedent  to  the  acceptance  of 
the  said  trust  by  the  said  Trustee,  or  any  successor  thereto,  as  follows : 

The  Trustee  shall  not  be  answerable  for  any  act,  default,  neglect  or  mis- 
conduct of  any  of  its  agents  or  employees,  by  it  appointed  or  employed,  in 
connection  with  the  execution  of  any  of  the  said  trusts,  nor  in  any  other 
manner  answerable  or  accountable,  under  any  circumstances  whatsoever, 
except  for  bad  faith.  The  recitals  contained  herein,  or  in  the  bonds,  as  to 
priority  of  lien,  or  any  other  matter  whatsoever,  are  made  by  and  on  the 
part  of  the  Realty  Company,  and  the  Trustee  assumes  no  responsibility  for 
the  correctness  of  the  same.  It  shall  not  be  the  duty  of  the  Trustee  to  file 
or  record  at  any  time  this  deed  of  trust  or  any  other  mortgages  or  deeds  of 
trust  that  may  be  required  hereunder,  nor  to  do  any  other  act  or  acts  suit- 
able and  proper  to  be  done  for  the  creation  or  continuance  of  the  lien  or 
liens  thereby  intended,  nor  to  effect  insurance  against  fire  or  explosion,  nor 
to  renew  any  policies  of  insurance,  nor  to  keep  itself  informed  as  to  the  pay- 
ment of  any  taxes  or  assessments,  nor  to  require  such  payments  to  be  made. 
The  Trustee  may,  however,  in  its  discretion,  do  any  or  all  of  these  things. 
Neither  shall  the  Trustee  be  held  responsible  for  the  nature  or  amount  of 
the  security  mortgaged  to  it  hereunder.  The  Trustee  shall  not  be  compelled 
10  take  any  action,  as  Trustee,  under  this  mortgage,  unless  properly  requested 
and  in  every  respect  indemnified  to  its  full  satisfaction.  The  Trustee  shall 
bt  entitled  to  reasonable  compensation  for  all  services  rendered  hereunder  or 
in  connection  with  the  trust.  This  compensation,  together  with  any  and  all 
necessary  and  reasonable  expenses,  charges,  counsel  fees  and  other  disburse- 
ments incurred  by  the  Trustee  in  the  discharge  of  its  duties,  as  such,  shall  be 


BOND  ISSUES.  329 

paid  by  the  Realty  Company,  or  out  of  the  trust  estate  upon  which  they  are 
hereby  made  a  lien,  prior  to  that  of  the  bonds  issued  hereunder.  The  Trustee 
shall  be  protected  in  acting  upon  any  notice,  consent,  request,  certificate, 
bond  or  other  paper  or  document  believed  by  it  to  be  genuine  and  signed  by 
the  proper  party.  The  Trustee  shall  be  held  responsible  for  the  due  authen- 
tication by  certificate  of  the  bonds  issued  hereunder,  and  for  the  custody  and 
disposition,  as  herein  provided,  of  the  securities  and  moneys  received  by  it 
hereunder. 

Eighteenth. — It  is  covenanted  and  agreed  between  the  parties  hereto  that 
the  words  "  Realty  Company  "  when  used  in  these  presents  mean  the  party 
issuing  the  bonds  herein  referred  to;  that  the  word  "Trustee"  means  the 
corporation  charged  with  the  execution  of  the  trust  herein,  whether  the  same 
be  the  Metropolis  Trust  Company  of  the  City  of  New  York,  or  any 
successor  or  successors  in  the  trust  hereby  created ;  that  the  word  "  bonds 
means  the  bonds  issued  hereunder;  and  the  words  "Trustee,"  "bond," 
"  bondholder  "  and  "  holder  "  shall  include  the  plural  as  well  as  the  singular 
number  and  the  term  "  majority  "  shall  signify  the  majority  in  amount. 

Nineteenth. — It  is  covenanted  and  agreed  that  this  indenture  may  be  exe- 
cuted in  several  counterparts,  each  of  which  so  executed  shall  be  deemed 
to  be  an  original,  and  such  counterparts  shall  together  constitute  but  one  and 
the  same  instrument. 

In  Witness  Whereof,  the  Remsen  Realty  Company  has  caused 
its  corporate  name  to  be  hereunto  subscribed  by  its  President 
and  its  corporate  seal  to  be  affixed  and  attested  by  its  Secre- 
tary and  the  METROPOLIS  TRUST  COMPANY  OF  THE  CITY  OF 
NEW  YORK,  in  token  of  its  acceptance  of  the  trust  hereby 
created,  has  caused  its  corporate  name  and  seal  to  be  here- 
unto affixed  by  its  President,  and  attested  by  its  Secretary 
on  this  twelfth  day  of  April,  one  thousand  nine  hundred  and 
four. 

REMSEN  REALTY  COMPANY, 

I  CORPORATE  )  By  FRANKLIN  MOFFAT, 

(      SEAL.     )  President 

ATTEST: 

CHARLES  E.  WARREN, 

Secretary. 

METROPOLIS  TRUST  COMPANY  OF  THE  CITY  OF  NEW  YORK, 

As  Trustee. 

3*  CORPORATE  7  By  STANDFORD  NIVENS, 

(      SEAL.     }  President 

ATTEST: 

BARTLEY  HAYDEN, 

Secretary. 

(For  notarial  acknowledgment  for  president  of  each  corporation  see 
Form  122.  For  resolution  authorizing  delivery  of  bonds  see  Forms  130, 
131.) 


It  will  be  understood  that  the  preceding  form  has,  on  ac- 
count of  space  limits,  been  reduced  to  its  simplest  terms.  An 
ordinary  deed  of  trust  will  frequently  cover  from  forty  to  fifty 
pages,  and,  where  the  matter  is  complex,  will  largely  exceed 


880  CORPORATE  MANAGEMENT. 

this.  The  form  as  given  is,  however,  a  good  working  model, 
has  received  the  endorsement  of  some  of  the  leading  corpora- 
tion attorneys  of  the  country  and  will  be  found  a  safe  and 
excellent  basis  upon  which  to  build  up  the  more  elaborate 
instruments  when  required. 


GENERAL   INDEX, 

[References  are  to  pages.] 
(For  numbers  and  titles  of  Forms  see  Table  of  Contents.) 


A 
ACCEPTANCE  OF  CHASTER,  24. 

ACCOUNTS,  Audit  of,  73. 

Books  of,  77,  78,  132. 

ACKNOWLEDGMENT,  Corporate,  278,  279,  284. 
Forms,  278,  279,  284. 
of  Charter,  22,  171,  174. 

Forms,  171,  174. 

of  Corporate  Instrument,  142,  278,  279,  284. 
Forms,  278,  279,  284. 

ADJOURNED  MEETING  of  Directors,  118,  122. 

of  Stockholders,  50,  51,  99,  106. 
Form,  259. 

ADJOURNMENT,  99,  106,  112,  113,  118,  122. 

ADOPTION  OF  BY-LAWS,  18,  25,  28,  29,  65,  66. 
Form,  251. 

ADVANTAGES  OF  CORPORATE  FORM,  19,  20. 

AFFIDAVITS,  Secretary's,  280,  281,  285. 
Forms,  280,  281,  285. 
Treasurer's,  279. 
Form,  279. 

AGENT,  Appointment  of,  25,  287.    (See  also  Attorney.) 

Forms,  291,  292. 
Signature,  269. 
Form,  269. 

AGREEMENT,  Execution  of,  141,  142,  268,  269.    (See  also  Contracts.) 

Forms,  201,  268,  269. 
Signatures  to,  141,  142,  265-269. 

Forms,  266-269. 
Subscription,  145,  146. 

331 


332  GENERAL  INDEX. 

[References  are  to  pages.] 

ALPHABETICAL  LIST  OF  STOCKHOLDERS,  95,  97,  no,  221,  222. 

Form,  221. 

AMENDMENT  of  By-Laws,  30,  65,  66,  90,  91,  105. 

Form,  231. 
of  Charter,  22,  23. 
of  Minutes,  100,  101,  116,  127,  128. 

ANNUAL  ELECTION  OF  DIRECTORS,  45,  47,  48-50,  103-105,  312. 

Forms,  253,  262,  263. 

ANNUAL  MEETING  OF  STOCKHOLDERS,  45,  48,  93-107. 

Forms,  223,  224,  262,  263. 
Notice  of,  47,  93,  94,  99,  100. 
Forms,  246,  247. 

ANNUAL  REPORTS,  101,  102,  117,  142,  228-230.    (See  also  Reports.) 
Forms,  228-230. 

APPLICATION  FOR  CHARTER.    (See  Certificate  of  Incorporation.) 

APPOINTMENT  of  Agent,  25,  287. 

Forms,  291,  292. 
of  Attorney,  25,  287-292. 

Forms,  288-292. 
of  Officers,  19,  25,  64,  71,  72. 
of  Proxies,  51,  52,  94,  95,  97,  98,  190-197,  250. 

Forms,  191-196. 

APPROVAL  OF  MINUTES,  100,  101,  116,  127,  128. 

ARTICLES  OF  ASSOCIATION.    (See  Certificate  of  Incorporation.) 

ASSESSMENTS,  36,  37. 

Notice  of,  212. 

Form,  212. 
Waiver  of  Notice  of,  213. 

Form,  213. 

ASSETS,  Sale  of  Entire,  in,  112,  203-206,  257-259. 
Forms,  203,  204. 

ASSIGNMENT  of  Contract,  297. 

Forms,  296,  297. 
of  Instalment  Scrip,  159. 

Form,  159. 
of  Patent,  295. 

Forms,  294-296. 
of  Property  for  Stock,  35,  36,  43,  149,  205,  206,  216-219. 

Forms,  205,  206,  218,  219,  251,  252,  254-256. 
of  Receipt,  156,  159. 

Forms,  156,  159. 


GENERAL  INDEX.  333 

[References  are  to  pages.] 

of  Stock,  20,  38,  39,  134-139,  167,  168,  300,  301. 

Forms,  167,  168,  300. 
in  Blank,  134,  135,  167,  168. 

Form,  167. 
of  Subscriptions,  159,  217,  219. 

Forms,  159,  219. 

ATTESTATION  OF  SEAL,  90,  142,  267,  268. 

Forms,  268,  288,  289,  291,  292. 

ATTORNEY,  Appointment  of,  25,  287-292.    (See  Proxies.)     (See  Counsel) 
Forms,  288-292. 

AUDITING  COMMITTEE,  83,  211. 
AUDIT  OF  ACCOUNTS,  73,  211. 
AUDITOR,  83. 

B 

BANK  DEPOSITS,  87,  201. 

Forms,  201,  282. 

BILL  OF  SALE,  294. 

Forms,  293-294. 

BOARD  OF  DIRECTORS.    (See  Directors.) 

BOND  of  Indemnity,  39,  40,  310. 

Forms,  309,  310. 
of  Treasurer,  77,  78,  256,  309. 
Form,  308. 

BONDS,  Issuance  of,  87,  317-329. 
Forms,  317-329- 

BOOKS,  Account  Books,  77,  78,  132. 
Closing  Books,  38,  93,  94. 
Corporation  Books,  132-140,  300-307. 
Inspection  of,  41,  140. 
Minute  Book,  124,  125,  256. 
Secretary's  Books,  41,  76,  132-140,  300-307. 
Stock  Book,  41,  95,  98,  139,  140,  301-305. 

Form,  303. 
Stock  Certificate  Book,  37,  133-137,  160-168. 

Forms,  161-168. 
Stock  Ledger,  41,  139,  140,  306-307. 

Form,  306. 
Transfer  Book,  38,  39,  41,  137,  138,  300,  301. 

Form,  300. 
Treasurer's  Books,  77,  132,  211. 


334  GENERAL  INDEX 

[References  are  to  pages.] 

BORROWING  MONEY,  87. 
BUSINESS  CORPORATIONS,  16. 

BUSINESS,  New,  105,  117,  118. 

Order  of,  53,  67,  96,  113,  115,  121,  220,  221. 
Special,  no,  111-113,  121,  122. 
Unfinished,  105,  117. 

BY-LAWS,  18,  25,  28-92,  176-189. 

Forms,  177-189. 

Amendment  of,  30,  65,  66,  90,  91,  105. 
Certification  of,  179. 
Certified  Extract  from. 

Form,  282. 
Classification  of,  32. 
Enforcement  of,  30,  31,  90. 
Making  of,  28,  29,  91,  92,  176,  180.  181. 
Nature  of,  28,  34,  176. 
Non-observance  of,  31,  32. 
Power  to  Make,  65,  66. 
Record  of,  33,  125. 
Report  of  Committee  on,  231. 


CALENDAR,  Corporate,  93,  143,  144,  311-316. 
Forms,  313-316. 

CALLED  MEETING.    (See  Special  Meeting.) 

CALL  AND  NOTICE,  108,  238-248. 

Proof  of,  99,  loo,  no,  115,  121. 

CALLS,  238-^243. 

Forms,  239-242. 

CALLS  AND  WAIVERS,  46,  62,  no,  113,  120,  121,  232-237. 
Forms,  233-237. 

CALL  OF  ROLL,  97-99,  109,  no,  115,  223.    (See  also  List  of  Stockholders.) 
Form,  222. 

CALLS  FOR  ASSESSMENTS,  36,  37. 

Forms,  212,  213. 

CAPITAL  STOCK.    (See  Stock.) 


GENERAL  INDEX.  335 

[References  are  to  pages.] 

CERTIFICATE  OF  INCORPORATION,  18-27,  169-175. 

Forms,  170-174. 

Amendment  of,  22,  24. 

Certified  Copy,  23. 

Execution  of,  22,  171,  173,  174, 

Fees,  171,  172,  174. 

Filing  of,  23,  24,  171,  174. 

Parties,  21. 

Purposes,  21. 

Powers  Incident  to,  24-26. 

CERTIFICATE,  of  Inspectors,  95,  103,  225-227. 
Forms,  226,  227. 
of  Secretary. 

Forms,  179,  280,  282-286. 

CERTIFICATE  OF  STOCK,  17,  37-41,  133-137,  160-168. 
Forms,  161-168. 

Assignment  of,  20,  38, 39, 134-139*  167,  168,  300,  301 

Forms,  167,  168,  300. 
Book,  37,  133-137,  160-168. 
Cancellation  of,  136,  137. 
Common  Stock,  35,  162,  163. 

Form,  161. 

Issue  of,  37,  38,  76,  133-135. 
Lost,  39-41.    (See  Indemnity  Bond.) 
Preferred  Stock,  41-43,  163-166. 

Forms,  164,  165. 

Registry  of,  37-39,  41,  132,  138,  300-307. 
Signatures,  37,  73,  76,  160. 
Stub,  161-163. 
Style,  160. 

Temporary,  134,  160. 
Transfer  of,  20,  38, 39, 4*,  134-139, 167, 168,300,301. 

Forms,  167,  168. 
Transfer  Agent,  138. 

CERTIFIED  RESOLUTION. 

Forms,  282-285. 

CERTIFIED  TRANSCRIPT. 

Forms,  282-285. 

CHAIRMAN  OF  BOARD,  83. 

CHARTER.    (See  Certificate  of  Incorporation.) 

CHECKS.    (See  Corporate  Checks.) 


336  GENERAL  INDEX. 

[References  are  to  pages.1 

CHATTEL  MORTGAGE,  Corporate. 

Form,  298. 

CITIZENSHIP  OF  CORPORATION,  44 

CLASSIFICATION  of  By-Laws,  32. 

of  Corporations,  15,  16. 
of  Directors,  60,  61. 
of  Stock,  34-36,  41-43. 

CLOSING  BOOKS,  38,  93,  94. 

COMMERCIAL  PAPER,  271-277. 

Forms,  271-277. 

COMMITTEE,  Auditing,  83. 

Executive,  66,  67. 
Report  of,  231. 
Form,  231. 

COMMON  STOCK,  35,  162,  163. 
Form,  161. 

COMPANY,  15,  162. 

Joint  Stock,  16. 

CONSENT  MEETINGS,  62,  120,  122,  237. 
Form,  237. 

CONTRACTS,  141,  142,  265-269,  293-299. 
Forms,  293-299. 

Assignment  of,  297. 
Forms,  296,  297. 
Execution  of,  141,  142. 

Forms,  201,  268,  269. 
Signatures  to,  141,  142,  265-269. 
Forms,  266-269. 

CORPORATE  ACKNOWLEDGMENT,  142,  278,  279,  284. 

Forms,  278,  279,  284. 
Books,  41,  132-140,  300-307. 

Forms,  161,  164,  165,  300,  303,  306. 
Calendar,  93,  143,  144,  311-316. 

Forms,  313-316. 
Checks,  87,  273-277. 

Forms,  274-277. 
Endorsement,  277. 

Forms,  277. 
Notes,  271,  272. 

Forms,  271,  272. 


GENERAL  INDEX.  387 

[References  are  to  pages.] 

Powers  of  Attorney,  287-292.  ,       j 

Forms,  288-292.  i . 

Proxies,  195. 

Forms,  195,  196. 
Seal,  25,  37,  76,  89,  90,  141,  142,  271,  274. 

Attestation  of,  90,  142,  267. 

Forms,  268,  288,  289,  291,  292. 
Signatures,  141,  142,  265-270. 

Forms,  266-270. 
System,  18. 

CORPORATION,  The,  15.    (See  separate  headings  for  Form  references.) 
Advantages,  of,  19,  20. 
Books,  41,  132-140,  300-307. 
Business,  16. 

By-Laws,  18,  25,  28-92, 176-189. 
Calendar,  93,  143,  144,  311-316. 
Certificate  of  Incorporation,  18-27,  169-175. 
Classification,  15,  16. 
Contracts  of,  141,  142,  293-299. 

Directors,  18,  57-70.  i 

Dissolution,  26. 
Domestic,  44. 
Ftreign,  44. 

Formation  of,  17,  18,  22-24. 
Liability  in,  19,  55,  56. 
Officers  of,  19,  71-84. 
Offices  of,  23,  67. 
Organization,  17,  18,  22-24. 
Powers,  24-26. 

Seal,  25,  76,  89,  90,  141,  271-274. 
Stock,  15,  16,  20,  34-44- 
Stockholders,  17,  19,  20,  45-56. 
Ultra  Vires,  27. 

COUNSEL,  71,  80,  81. 

CUMULATIVE  VOTING,  48-50. 

Cur  AND  DRIED  MINUTES,  130,  131. 


DEBT,  By-Law,  87. 

Directors'  Liability  for,  27,  68,  69,  70. 
Officers'  Liability  for,  27,  81,  82. 
Stockholders'  Liability  for,  19,  55,  56. 

22 


888  GENERAL  INDEX. 

[References  are  to  pages.] 

DECREASE  OF  CAPITAL  STOCK,  22,  23. 

DEED,  Corporate. 

Form,  299. 

DEED  OF  TRUST,  317-330. 

Forms,  320-329. 

DE  FACTO  OFFICER,  84. 

DEPOSIT  IN  BANK,  87,  201. 

Forms,  201,  282. 

DIRECTORS,  18,  57-7O.     (See  separate  headings  for  Form  references.) 
Authority,  57,  58,  65,  90. 
By-Laws,  Power  to  Make,  65,  66. 
Call  for  Special  Meeting,  239,  243. 

Form,  239. 

Chairman  of  Board,  83. 
Classification,  60,  61. 
Compensation,  65. 
Dissent  from  Illegal  Action,  68. 
Duties,  57,  69. 
Election,  45-51,  103-105,  225-228,  253,  254,  312. 

New  York,  51. 

Election  of  Officers,  19,  25,  64,  71,  72. 
Executive  Committee,  66,  67. 
Failure  to  Elect,  48. 
Liabilities  of,  27,  68-70. 
Managing  Director,  78,  79,  202. 
Meetings,  61,  62,  63,  114-119,  120-123,  232,  234,  236,  237,  242,  243, 

249,  254-256,  260,  261,  312. 
Method  of  Action,  58,  122,  123. 
Number  of,  18,  23,  57,  58. 
Order  of  Business,  67,  115,  121,  221. 
Powers  of,  57,  58,  64-66,  90,  203. 
Qualifications,  49,  59. 
Quorum,  63,  66,  115. 
Removal,  60. 
Resignations,  207-209. 
Salaries,  65. 
Temporary,  207,  208. 
Vacancies,  60. 

DISSOLUTION  OF  CORPORATION,  26. 

DIVIDENDS,  85,  86. 

Forms,  202,  213,  214. 

DOMESTIC  CORPORATIONS,  44. 


GENERAL  INDEX. 
[References  are  to  pages.] 

DURATION  OF  CORPORATION,  20. 

DUTIES  of  Counsel,  80,  81. 
of  Directors,  57,  69. 
of  General  Manager,  79,  80. 
of  Managing  Director,  78,  79. 
of  Officers,  71. 
of  President,  72,  73. 

of  Secretary,  76,  132,  141-144.     (See  also  Secretary.) 
of  Treasurer,  77,  78. 


ELECTIONS,  Annual  for  Directors,  45-51,  103,  104-105,  225-227,  253,  313. 

Forms,  253,  262,  263. 
Inspectors  of,  48,  49,  95,  103-105,  225-227,  253,  254. 

Forms,  225-227. 
Notice  of,  47,  246,  247. 

Forms,  214,  215,  246,  247. 
of  Officers,  19,  25,  64,  71,  72,  286. 
Proxies  for,  51,  52,  94,  95,  97,  98,  190-197,  250. 

Forms,  191  to  196. 
Quorum  at,  50,  51,  97-99. 
Voting,  47-50. 

ENDORSEMENT,  Corporate,  277. 
Form,  277. 

ENFORCEMENT  OF  BY-LAWS,  30,  31,  90. 

ENTRY  OF  MINUTES,  124-131,  249-256,  257-261,  262-264. 

EXCHANGE  OF  PROPERTY  FOR  STOCK,  35,  36,  43,  149,  205,  206,  216-219. 

Forms,  205,  206,  218,  219, 251, 252,254-256. 

EXECUTION  OF  CONTRACTS,  141,  142,  265-269. 

Forms,  201,  266-269,  293-299. 

Certificate  of  Incorporation,  22,  171,  173,  174. 
Forms,  171,  173,  174- 

EXECUTIVE  COMMITTEE,  66,  67. 
EXEMPTIONS  FROM  TAXATION,  143,  172,  174. 


FEES  FOR  INCORPORATION. 

New  Jersey,  174- 
New  York,  171,  172. 

FILING  CHARTER,  23,  24,  171,  174. 


340  GENERAL  INDEX. 

[References  are  to  pages.] 

FINANCE,  85-88. 

Bank  Deposits,  87,  201. 
Debts,  87. 
Reserve  Fund,  86. 
Surplus,  85,  88. 

FIRST  MEETING,  24,  113,  232,  233,  234,  249-256. 
Minutes  of,  249-256. 
Forms,  251-256. 

FOREIGN  CORPORATIONS,  44. 
FORMALITIES,  Necessity  of,  107. 
FORMATION  OF  A  CORPORATION,  17,  18,  22,  24. 
FULL  PAID  STOCK,  35,  43,  44,  149,  205,  216-218. 
FUNDS  OF  CORPORATION,  85-88. 


GENERAL  MANAGER,  64,  71,  79,  80. 

Notice  of  Election  as. 

Form,  215. 

GUARANTEED  STOCK,  35.    (See  Preferred  Stock.) 


I 

INCORPORATION,  Advantages  of,  19,  20. 

Certificate  of,  18-27,  169-175. 
Forms,  170-174. 

INCORPORATORS,  21. 

INCREASE  OF  CAPITAL  STOCK,  22,  23. 

INDEBTEDNESS,  87. 

INDEMNITY  BOND,  39,  40,  310. 

Forms,  309,  310. 

INSPECTION  OF  BOOKS,  41,  140. 

INSPECTORS  OF  ELECTION,  48,  49,  95,  103-105,  225-227,  253,  254. 
Forms,  225-227. 

INSTALMENT  SCRIP,  157-1 59. 

Assignment  of,  159. 
Endorsement,  158. 

ISSUANCE  OF  STOCK  FOR  PROPERTY.    (See  Exchange  of  Property  for  Stock.) 


GENERAL  INDEX. 
[References  are  to  pages.] 

ISSUE  OF  BONDS,  87,  317-329. 

Forms,  317-329. 

ISSUE  OF  STOCK.    (See  Stock  Certificate.) 

ISSUED  STOCK,  35. 

IRREGULAR  PROCEDURE,  31,  32,  107. 

J 

JOINT  STOCK  COMPANIES,  16. 

L 
LAND,  Deed  of. 

Form,  299. 
Power  to  Convey. 

Forms,  289,  290. 
Power  to  Hold,  25. 

LAW,  Parliamentary,  91. 

LEDGER,  Stock,  41,  139,  140,  306-307. 
Form,  306. 

LIABILITY  of  Directors,  27,  68-70. 
of  Officers,  27,  81,  82. 
of  Stockholders,  19,  55,  56. 

LIST,  of  Stockholders,  93,  95,  97,  no,  220-223. 

Forms,  221,  222. 
Subscription,  145-152. 
Forms,  146-151. 

LOST  CERTIFICATE,  39,  40,  41. 

Indemnity  Bond,  39,  40,  309,  310. 
Forms,  309,  310. 


M 

MANAGER,  General,  64,  71,  79,  80. 

Notice  of  Election,  215. 

MANAGING  DIRECTOR,  78,  79,  202. 

Appointment  of,  202. 

MEETINGS,  93-123,  220-224.    (See  also  Minutes.) 
Adjourned,  50,  51,  99,  106,  118,  122. 

Form,  259. 

Adjournment,  99,  106,  112,  113,  118,  122. 
Annual,  45,  48,  93-107. 

Forms,  223,  224,  262,  263. 


348  GENERAL  INDEX. 

[References  are  to  pages.] 

Calls,  238-243. 

Forms,  239-242. 
Calls  and  Waivers  for,  46,  62,  no,  113,  120,  121,  232-237. 

Forms,  233-237. 
Consent,  62,  120,  122,  237. 

Form,  237. 
Directors',  61,  62,  63,  114-119,  120-123,  312. 

Forms,  254,  260,  263. 
Directors'  First,  24,  232,  234,  249. 

Forms,  254-256. 
Regular,  61,  62,  114-119,  312. 

Forms,  263,  264. 
Special,  62,  63,  120-123,  236,  237,  242,  243,  260,  261. 

Forms,  236,  237,  242,  247,  260,  261. 
New  Business,  105,  117,  118. 
Notice  of,  47,  63,  93,  94,  99,  100,  no,  114,  "5,  121,  244-248. 

Forms,  244-248. 
Officers',  52,  53,  96,  109,  121. 
Opening,  96,  97,  109,  114,  121. 
Order  of  Business,  53,  67,  96,  113,  115,  121,  220,  221. 

Forms,  220,  221. 

Proof  of  Notice,  99,  100,  no,  115,  121,  280,  281. 
Proxies,  51,  52,  94,  95,  97,  98,  190-197,  250. 

Forms,  191-196. 
Publication,  47,  93,  94,  100. 

Forms,  245,  247,  281. 
Quorum,  50,  51,  63,  66,  97,  99,  115. 
Roll  Call,  97-99,  109,  no,  115,  223. 
Special  Business,  no,  in,  112,  113,  121,  122. 
Stockholders',  Adjourned,  50,  51,  259,  260. 

Form,  259. 
First,  24,  113,  232,  233,  234. 

Forms,  251-253. 
Regular,  Annual,  45,  48,  93-107. 

Forms,  223,  224,  262,  263. 
Special,  46,  108-113,  235-242. 

Forms,  202, 235,  236, 239-241, 244, 245, 257-259. 
Unfinished  Business,  105,  117. 
Voting,  47-50. 

MINUTES,  76,  93-107,  109-113,  116,  124-131,  249-264.     (See  also  Meetings.) 
Amendment  of,  100,  101,  116,  127,  128. 
Approval  of,  100,  101,  116. 
Arrangement  of,  125,  251-264. 
Book  of,  124,  125,  256. 
Certified,  282-285. 
"Cut  and  Dried,"  130,  131. 


GENERAL  INDEX.  343 

[References  are  to  pages.] 


Directors'. 

First,  249,  254-256. 

Forms,  254-256. 
Regular,  116,  263,  264. 

Forms,  263,  264. 
Special,  121,  260,  261. 
Forms,  260,  261. 

Entry  of,  124-131,  249-256,  257-261,  262-264. 
Outline  Minutes,  93,  130,  223,  224. 

Form,  223. 
Protest,  129. 
Reading,  100,  101,  116. 
Signing,  106,  127. 
Stockholders'. 

Annual,  93-107,  223,  262,  263. 
Forms,  223,  224,  262,  263. 
First,  249-253. 

Forms,  251-253. 
Special,  109-113,  257-260. 

Forms,  257-260. 

Taking  Proceedings,  128,  129,  256. 
Transcript  of. 

Forms,  282-285. 

MORTGAGE,  87,  317-330. 

Forms,  320-329. 
Chattel,  298. 

MOTIONS,  118,  129,  130,  198-200.    (See  also  Resolutions.) 
Forms,  199,  200. 

N 

NAME,  Change  of,  22. 
NEW  BUSINESS,  105,  117,  118. 

NOTARIAL  ACKNOWLEDGMENT,  278,  279,  284. 

Forms,  278,  279,  284. 

NOTES,  Corporate,  271,  272. 

Forms,  271,  272. 

NOTICES,  212-215,  244-248. 

of  Directors'  Meetings,  63,  114,  115,  121,  247,  248 

Forms,  247,  248. 
of  Dividend,  213,  214. 

Forms,  213,  214. 
of  Election  as  Director,  214,  215. 

Forms,  214,  215. 


344  GENERAL  INDEX. 

[References  are  to  pages.] 

of  Election  as  General  Manager,  215. 

Form,  215. 
of  Stock  Assessment,  212. 

Form,  212. 
of  Stockholders'  Meeting,  47,  93,  94,  99,  100,  no,  244-247. 

Forms,  244-247. 
Proof  of  Notice,  99,  100,  no,  115,  121,  280,  281. 

NUMBER  OF  DIRECTORS,  18,  23,  57,  58. 
Change  of,  23. 

O 

OATH  of  Inspectors,  48,  95,  103,  225-227,  254. 

Forms,  225,  227. 
of  Secretary,  N.  J. 

Forms,  307,  308. 

OBJECTS  OF  CORPORATION,  21. 

OFFICE,  Change  of,  23. 

In  other  States,  67. 
Principal,  67. 

OFFICERS,  19,  71-84.     (See  also  President,  Treasurer,  Secretary,  etc.) 
De  Facto,  84. 

Election  of,  19,  25,  64,  71,  72,  286. 
Liabilities  of,  27,  81,  82. 
of  Meetings,  52,  53,  96,  109,  121. 
Qualifications,  71. 
Removal,  64,  72. 

Reports,  73,  75,  101,  102,  117,  228,  230. 
Resignations,  207-211. 
Salaries,  64,  73,  75-77,  79,  80. 
Vacancies,  64,  72. 

OPENING  MEETING,  96,  97,  109,  114.  121. 

ORDER  OF  BUSINESS,  53,  67,  96,  113,  115,  121,  220,  221. 
Forms,  220,  221. 

ORGANIZATION  of  a  Corporation,  17,  18,  22-24. 
First  Meeting  for,  24,  113. 

OUTLINE  MINUTES,  95,  130,  223,  224. 
Form,  223. 

P 

PAID  UP  STOCK,  35,  43,  44,  149,  205,  216-218. 
PARTIES  TO  CHARTER,  21.  1 


GENERAL  INDEX.  345 

[References  are  to  pages.] 

PAR,  Issues  of  Stock  for  Less  Than,  36. 
PARLIAMENTARY  LAW,  91. 

PATENT,  Assignment  of,  295. 

Forms,  294-296. 

PAYMENT  FOR  STOCK  IN  PROPERTY.    (See  Exchange  of  Stock  for  Property.) 
PENALTIES  FOR  INFRACTION  OF  BY-LAWS,  30,  31,  90. 

PLACE  OF  BUSINESS,  67. 

Change  of,  23. 

PLEDGEE,  48,  86. 

POWERS  OF  ATTORNEY,  287-292.    (See  also  Proxies.) 

Forms,  288-292. 

POWERS  of  Corporation,  24-26. 

of  Directors,  57,  58,  64-66,  90,  203. 

of  Officers.    (See  President,  Secretary,  etc.) 

of  Stockholders,  54,  55. 

PREFERRED  STOCK,  41-43,  163-166. 

Forms,  164,  165,  166. 

Rights  of  holders  of,  41,  42,  54. 

PRESIDENT,  72-75. 

Call  for  Special  Meeting,  239,  241-243. 

Forms,  239,  241,  242. 
Duties,  72,  73. 
Election,  64,  71. 
Liabilities,  27,  81,  82. 
Powers,  74,  75- 
Removal,  72. 
Resignation,  210. 

Form,  210. 
Report,  73,  75,  101,  102,  228,  229. 

Forms,  228,  229. 
Salary,  64,  73,  75- 
Signature,  265-267. 

Forms,  266-270. 
Vice,  71,  75,  76. 

PRINCIPAL  OFFICE,  67. 
PROCEDURE,  93-144. 

PROMISSORY  NOTES,  271,  272. 

Forms,  271,  272. 

PROOF  OF  NOTICE,  99,  100,  no,  115,  121,  280,  281. 
Forms,  280,  281. 


346  GENERAL  INDEX. 

[References  are  to  pages.] 

PROPERTY,  for  Stock.    (See  Exchange  of  Property  for  Stock.) 
of  Corporation,  25. 

Sale  of  Entire  Property,  in,  112,  203-206,  257-259. 
Forms,  203-206. 

PROTEST  IN  MINUTES,  129. 

PROXIES,  51,  52,  94,  95,  97,  98,  190-197,  250. 
Forms,  191-196. 
Blank,  94,  95,  191. 
Powers  Conveyed,  190-195. 
Revocation  of,  190,  193,  197. 

Form,  197. 
Signature,  191. 

PUBLICATION,  47,  93,  94,  100. 

Forms,  245,  247,  281. 

PURPOSES,  Charter,  21. 

Q 

QUALIFICATIONS  of  Directors,  49,  59. 
of  Incorporators,  21. 
of  Officers,  71. 

QUORUM,  at  Directors'  Meetings,  63,  66,  115. 

at  Stockholders'  Meetings,  50,  51,  97-99. 


R 

RATIFICATION  OF  UNAUTHORIZED  ACTION,  123,  202. 

Form,  202. 

READING  OF  MINUTES,  100,  101,  116. 
REAL  PROPERTY.     (See  Land.) 

RECEIPTS  FOR  SUBSCRIPTIONS,  153-159. 

Forms,  154-159. 
Assignment  of,  156,  159. 

RECEIPTS  AND  DRAFTS,  269. 

Forms,  270,  273. 

RECORDS.    (See  Minutes.) 

RECORDING,  By-Laws,  33,  125. 

Certificate  of  Incorporation,  23,  24,  125,  171,  174 
Minutes,  124-131,  249-256,  257-261,  262-264. 
Motions,  199,  200. 

REGISTRAR,  138. 


GENERAL  INDEX.  847 

[References  are  to  pages.] 

REGISTRY  OF  STOCK,  37,  39,  41,  132,  138,  300-307. 
Forms,  300-307. 

REGULAR  MEETINGS. 

Directors',  61,  62,  114-119,  312. 

Forms,  263,  264. 
Stockholders',  45,  48,  93-107. 
Forms,  223,  224,  262,  263. 

REDUCTION  of  Capital  Stock,  22,  23. 

of  Number  of  Directors,  23. 

REMOVAL  of  Directors,  60. 
of  Officers,  64,  72. 
of  Principal  Office,  23. 

REPORTS,  101,  102,  117,  142,  143,  228-231. 
Forms,  228-231. 

Annual,  101,  102,  117,  142,  228-230. 
Committee,  231. 
Disposition  of,  102,  117,  199. 
Officers,  73,  75-77,  101,  102,  117,  228,  229. 
Tax,  142,  143. 

RESERVE  FUND,  86. 

RESIDENCE  OF  CORPORATION,  44,  67. 

RESIGNATIONS,  207-211. 

Forms,  207-211. 

How  Addressed,  209. 
Non-acceptance,  209,  210. 
Peremptory,  209,  210. 
Right  to  Withdraw,  208. 

RESOLUTIONS,  118,  129,  130,  201-206,  317.     (See  also  Motions.) 
Forms,  201-206. 

Certified,  282-285. 

REVOCATION  OF  PROXY,  190,  193,  197. 
Form,  197. 

RIGHTS  OF  STOCKHOLDERS,  17,  31,  40,  47,  48,  54. 

ROLL  CALL,  97-99,  109,  no,  115,  223.    (See  also  List  of  Stockholders.) 
Form,  222. 

RULES  OF  ORDER,  91. 


346  GENERAL  INDEX. 

[References  are  to  pages.] 

s 

SALARIES  of  Directors,  65. 

of  Officers,  64,  73,  75~77,  79,  80. 

SALE,  Bill  of,  294. 

Forms,  293,  294. 
of  Entire  Assets,  m,  112,  203-206,  257-259. 

Forms,  203,  204. 
Ratification  of. 
Form,  202. 

SEAL,  25,  37,  76,  89,  oo,  141,  142,  271,  274, 
Attestation  of,  90,  142,  267,  268. 

Forms,  268,  288,  289,  292. 

SECRETARY,  19,  71,  76,  141-144. 
Affidavit. 

Forms,  280,  281,  285. 
Books  of,  41,  76,  132-140,  300-307. 

Forms,  300,  303,  306. 
Certificate. 

Forms,  179,  280,  282-286. 
Duties. 

Affixing  Seal,  37,  76,  90,  141. 

Attestation  of  Seal,  90,  142,  267,  268. 

Call  of  Roll,  97,  98,  no,  115,  121,  223. 

Correction  of  Minutes,  100,  101,  116,  127,  128. 

Closing  Transfer  Book,  93. 

Custodian,  76,  89,  102,  103,  117,  124,  141,  196,  207,  209, 

228,  250. 
Furnishing  Requisites  at  Meetings,    53,    72,    93,    95,   96, 

109,  115. 

Issue  of  Stock,  37,  39,  40,  76,  134-138,  167,  168,  304,  305. 
List  of  Stockholders,  45,  76,  93,  95,  no,  221-223. 
Notice  of  Meetings,  47,  63,  76,  93,  94,  99,  "O,  114,  "0, 

238-241,  243-248,  260. 
Officer  of  Meeting,  52,  53,  96,  114,  115. 
Preparation  for  Meetings,  93~95,  "4,  130,  223,  224,  237.  ' 
Proof  of  Due  Notice,  99,  100,  no,  115,  121,  280,  281. 
Proxies,  94,  98,  191,  197. 
Reading  Minutes,  100,  no,  116. 
Recording,  33,  52,  76,  106,  no,  126,  127,  129-131,  198-200, 

256. 

Reports,  76,  142. 
Election,  64,  71. 
Liabilities,  27,  40,  81,  82. 


GENERAL  INDEX.  849 

[References  are  to  pages.] 

Oath. 

Forms,  307,  308. 
Powers,  141. 
Salary,  64,  76. 
Signature,  90,  106,  127,  141,  142,  265,  267. 

Forms,  267-269. 

SHAKES.    (See  Stock.) 

SIGNATURE,  Corporate  and  Official,  90,  127,  141,  142,  265-270. 

Forms,  266-270. 
to  Minutes,  106,  127. 

Forms,  252,  256,  258,  259,  261. 

SPECIAL  BUSINESS,  no,  in,  112,  113,  121,  122. 

SPECIAL  MEETINGS,  232-243.    (See  also  Meetings,  also  Minutes.) 

of  Directors,  62,  63,  120-123,  236,  237,  242,  243,  260,  261. 

Forms,  236,  237,  242,  247,  260,  261. 
of  Stockholders,  46,  108-113,  235-242. 

Forms,  202,  235,  236,  239-241,  244,  245,  257-259. 

STOCK,  15,  16,  20,  34-44- 

Assignment  of,  20,  38,  39,  134-139,  167,  168,  300,  301. 
Forms,  167,  168,  300. 

In  Blank,  134,  135,  167,  168. 

Form,  167. 
Book,  41,  95,  98,  139,  140,  301-305. 

Form,  303. 
Certificates,  17,  37-41,  133-137,  160-168. 

Forms,  161-168. 

Classification  of,  34,  35,  36,  41-43- 
Common,  35. 

Full  Paid,  35,  43,  44,  149,  2OS,  216-218. 
Guaranteed,  35. 
Issued  and  Outstanding,  35. 
Preferred,  41-43,  163-166. 
Treasury,  43,  44. 
Unissued,  35. 
Watered,  36. 
Decrease  of,  22,  23. 
Increase  of,  22,  23. 

Issuance  for  Property.    (See  Exchange  of  Property  for  Stock.) 
Issue  of,  37,  38,  76,  133-135- 
Ledger,  41,  139,  140,  306-307. 

Form,  306. 
Par  Value,  16,  17. 
Shares  of,  15,  16,  17. 


350  GENERAL  INDEX. 

[References  are  to  pages.] 

Subscriptions  to,  36,  145-152,  216,  217. 

Forms,  146-152. 
Transfer  of,  20,  38-40,  138,  139,  167,  168,  300-301. 

Forms,  167,  168,  300. 

STOCK  CERTIFICATE  BOOK,  37,  133-137,  160-168. 
Forms,  161-168. 

STOCKHOLDERS,  17,  19,  20,  45-56. 

Liabilities  of,  19,  55,  56. 

List  of,  93,  95,  97,  no,  220-223. 

Forms,  221,  222. 
Meetings  of.     (See  also  Meetings;  also  Minutes.) 

Adjourned,  50,  51,  259,  260. 

Annual,  45,  48,  93-107. 

First,  24,  113,  232,  233,  234. 

Proxies,  51,  52,  04,  95,  97,  98,  190-197,  250 

Quorum,  50,  51,  97-99. 

Special,  46,  108-113,  235-242. 
Powers,  54,  55. 
Rights,  17,  31,  40,  47,  48,  54- 

SUBSCRIPTIONS,  36,  145-152,  216,  217. 
Forms,  146-151. 

Assignment  of,  159,  217,  219. 

Forms,  159,  219. 
Receipts  for,  153-159- 
Forms,  154-159. 

SURPLUS,  85,  88. 

T 
TAXATION,  142,  143,  171,  172,  174. 

TESTIMONIUM  CLAUSE,  268,  269. 

Forms,  268,  269. 

TRANSCRIPT  FROM  MINUTES,  Certified. 

Forms,  282-285. 

TRANSFER  AGENT,  138. 

TRANSFER  BOOK,  38,  39,  41,  137,  138,  300,  301. 
Form,  300. 

TRANSFERS  OF  STOCK,  20,  38-40,  134-139,  167,  168,  300-301. 
Forms,  167,  168,  300. 


GENERAL  INDEX.  351 

[References  are  to  pages.] 


TREASURER,  Affidavit,  279. 

Bond  of,  77,  78,  256,  309. 

Form,  308. 
Books,  77,  132. 
Duties,  77,  78. 
Election,  64,  71,  286. 
Liabilities,  27,  81,  82. 
Powers,  77,  78. 
Receipts,  153,  155,  156. 

Form,  155. 
Removal,  64,  72. 
Report,  77,  102,  229. 

Forms,  229,  230. 
Resignation,  211. 
Salary,  64,  77. 
Signature,  269,  270,  273. 

Forms,  270,  272,  273. 

TREASURY  STOCK,  43,  44. 

TRUST,  Deed  of,  317-330. 

Forms,  320-329. 

TRUSTEES,  196.     (See  also  Directors.) 
Receipts,  153. 
Form,  154. 


U 
ULTRA  VIRES  ACTS,  27. 

UNFINISHED  BUSINESS,  105,  117. 
UNISSUED  STOCK,  35. 


VACANCIES,  Directors,  60. 
Officers,  64,  72. 

VICE-PRESIDENT,  71,  75,  76.    (See  President.) 

VOTING,  47-50. 

Cumulative,  48-50. 
Preferred  Stock,  41,  42,  43,  165. 
Proxies,  51,  52,  94,  95,  97,  98,  190-197,  250. 
Forms,  191-196. 


852  GENERAL  INDEX. 

[References  are  to  pages.] 

w 

WAIVER  OF  NOTICE,  46,  62,  no,  113,  120,  121,  232-237. 
Forms,  233-237. 

WAIVES  OF  ASSESSMENT,  213. 

Form,  213. 

WATERED  STOCK,  36. 
WORKING  CAPITAL,  86,  149. 


